Nepal Clearing House: Refund of IPO to be directly deposited to investor’s bank A/C in near future; Investors may be charged for the service

Non allotees IPO investors now no more need to queue up to get their money refunded. Merchant Banker (Issue Managers) will directly transfer the refund amount in their respective bank account. Nepal Clearing House limited (NCHL) is developing the technology for such provision. Nileshman Singh Pradhan, CEO of NCHL says, ‘We are providing this service by linking merchant bankers and banks using this technology. Till date 50% of the task has been accomplished. Investors will benefit the service from upcoming Baishak if things get completed on time as scheduled.” Investors are asked to fill up their bank account number in the IPO application form. Despite the fact that investors mention their account number in the application form merchant bankers have been refunding the money through ‘Account Payee Cheque’ and the investors deposit on their own. Due to the increasing number of applicants in Initial Public Offering (IPO) lately, refunding process has not been manageable. Investors may have to pay some extra charge if the money is to be directly transferred to their bank account. Banks charge up to Rs 30 from the investors for Account Payee Cheque Clearing if the amount is more than Rs 2 lakh. They are working on provision of charging extra amount is for automatically depositing the cheque. However, no fixed charge amount has been decided upon for the purpose. It can be a simple and easy way for investors to get their money refunded than other lengthy process. With this ‘One Touch Click’ provision the duration for investors to get the money refunded is expected to decrease. Along with the provision, investors can also get the cash dividend of companies directly in their accounts. Companies still owe millions rupees left for payment. The new provision will reduce this problem to some extent. Source: Aarthik Aviyan