State Bank of India, ICICI Bank and Corporation Bank are among the four banks

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that are likely to figure in the first batch of syndicated banks selected by the Securities and Exchange Board of India (Sebi) for the proposed new mechanism of IPO (initial public offering) applications supported by blocked amount.

These banks have tested the new system and Sebi is comfortable with their preparedness, said a senior Sebi official, who did not wish to be identified.

If everything goes according to the plan, the new system of IPO applications will come into place from early next month, or by the end of this month. The new system ensures that no money will flow out of an investors' account untill shares are allotted to him.

The new system is being brought in following complaints from various investor bodies that there were big delays by companies to refund the application money even months and years after the close of an IPO.

Applications Supported by Blocked Amount (ASBA) is aimed at ending this misconduct. ASBA will be available in all public issues made through the book-building route. Several banks including Punjab National Bank, Axis Bank and Union Bank had also tested the preparedness for the ASBA recently.

The Sebi official said only four or five banks will be selected for the ASBA process in the first stage. Other banks will be roped into the new system at different stages, he said.

The banks selected will be known as Self Certified Syndicate Bank (SCSB). These banks will offer the facility of applying through the ASBA process. A bank desirous of offering ASBA facility should submit a certificate to Sebi as per a format provided by the

regulator.

ASBAs can be accepted only by SCSBs, whose names appear in the list displayed on the Sebi website.

On inclusion in the list of SCSBs, a bank should commence its activities as an SCSB with effect from 1st or 15th of a month, whichever is earlier, from the date of such

inclusion.

According to Sebi, an SCSB should identify its designated branches at which an ASBA investor should submit the application. The banks should also identify the controlling branch (CB), which should act as a coordinating branch for the registrar to the issue, stock exchanges and merchant bankers.