SEBI Bars Stock Brokers From Accepting Cash From Clients
Brokers will accept cheques drawn only by clients and issue cheques in favour of clients for transactions, SEBI says
Market regulator SEBI today barred stock brokers from directly accepting cash from their clients as it looks to promote digital payments. Stock brokers are also not permitted to receive cash deposits in their bank accounts from clients.
“In view of the various modes of payment through electronic means available today, it is directed that stock brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker,” the regulator said in a circular.
According to SEBI, all payments would be received or made by stock brokers from or to the clients strictly by account payee crossed cheques or demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India.
“The stock brokers would accept cheques drawn only by the clients and also issue cheques in favour of the clients only for their transactions,” it said.
The government has been promoting various means for transfer or receipt of funds through digital mode for encouraging a cashless economy.