An alternate payment system for public issues that will not block retail investors’ money

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unless shares are actually allotted to them will be launched as a pilot by August-end, market regulator SEBI said on Tuesday.

“Hopefully by August-end, we will start the pilot project,” Sebi chairman C B Bhave told reporters on the sidelines of a seminar organised by the Financial Planning Standards Board India.

“We really don’t know how the system works. We need to get used to it. We have to sort out glitches if there are any in the beginning,” Bhave said.

Both the current system of payment through cheques and alternate system would co-exist, the Sebi chairman said. “It (alternate payment system) will not be pushed on to everybody,” he said.

The alternate payment system, called Additional Mode of Payment through Applications Supported by Blocked Amount (ASBA) — will exempt retail investors from making full advance fees and instead let the amount to be retained in bank accounts till the completion of

allotment.