INSUBCONTINENT EXCLUSIVE:
Board of India (Sebi) opposes delegating the responsibility of conducting know-your-client (KYC) formalities to individual entities due to
responsible for conducting and maintaining KYC records within the capital market ecosystem.
A long-pending proposal seeks to implement a
similar structure across the entire financial market ecosystem, including banks, insurance companies, and capital market
intermediaries.
The Sebi chief hinted that this proposal would only be feasible with a KRA-like system
that we will not permit Paytm-type contamination in our market
We all saw what happened with Paytm
Since the banking system lacks a KRA-type system, the problem with Paytm stays with Paytm
It does not spread to other banks
However, if we allowed Paytm into our system without a KRA, it would contaminate the entire system
ensure that things are validated
imposed restrictions on Paytm Payments Bank due to multiple lapses, including irregularities in the KYC process.
The Sebi chief also
mentioned that the regulator will soon consider mandating large brokers to offer block facilities, or application supported by blocked
amount (ASBA), for the secondary market
We should address this in our next board meeting
can block funds in their bank accounts, which will only be debited upon trade confirmation
On being mandated, this facility will be available for the equity cash segment.
The move to ASBA in the secondary market is expected to
benefit investors by Rs 2,800 crore
This mechanism has already been successfully implemented in the primary market.First Published: Jul 30 2024 | 7:42 PMIST
