Markets regulator Sebi on Friday proposed that listed companies should make all payments, such as dividends, dividends and redemptions, through electronic mode only. The proposal is aimed at simplifying payment processes and improving the security, convenience and efficiency of all investors.
The current LODR (Listing Obligations and Disclosure Requirements) rules of Sebi allow electronic payments but allow checks or warrants if electronic transfers fail, especially for amounts above Rs 1,500.
Failures occur when the store owner’s bank details are incorrect or unavailable, requiring companies to send checks. According to the latest data, 1.29 percent of electronic dividend payments failed in the top 200 listed companies, Sebi said.
In its discussion paper, the Securities and Exchange Board of India (Sebi) proposed to make all payments, including dividends and interest, electronically to both depositors and debentures.
Investors will be encouraged to update their relevant bank details with depositors to ensure smooth payments.
Sebi has highlighted several advantages of electronic payments such as being faster and more convenient than checks, reducing the risk of loss in transit, being environmentally friendly by reducing the use of paper, lower administrative costs for companies, making tracking easier for investors, and helping to reduce errors.
The Securities and Exchange Board of India (Sebi) has sought public comments on the proposal until October 11.
