Sebi Proposes Mandatory Electronic Payments for Listed Entities

The Securities and Exchange Board of India (Sebi) has proposed that all listed entities should process payments such as dividends, interests, and redemptions through electronic means only. This move aims to streamline payment processes, enhance security, and increase efficiency. Public comments are invited until October 11.

In a bid to streamline payment processes and enhance security, the Securities and Exchange Board of India (Sebi) has proposed that all payments, such as dividends, interests, and redemptions, be made through electronic mode only by listed entities.

The current Sebi LODR rules permit electronic payments but allow cheques or warrants if electronic transfers fail. Failures often occur when a securityholder's bank details are incorrect or unavailable.

Sebi's consultation paper highlights that electronic payments are faster and more convenient, mitigate risks of loss in transit, are environmentally friendly, reduce administrative costs, facilitate tracking, and minimize errors. Public comments on the proposal are open until October 11.