The Securities and Exchange Board of India (SEBI) is considering the development of a new payment infrastructure for the IPO secondary stock market.

Currently, non-retail investors must apply for IPOs through the Application for Blocked Amount Support (ASBA) system, under which banks have the right to freeze the amount used in IPO applications without deductions.

The amount will be debited from the investor’s bank account only when the investor’s IPO application is accepted. Under this payment system, large investors can still earn interest on the blocked amounts in their bank accounts, reducing their opportunity cost when filing for an IPO.

The move could have a mechanism similar to the IPO market, allowing investors to earn interest on amounts frozen in their bank accounts before trades settle for any purchases they make in the stock market.

Currently, secondary market stock purchases and sales are settled the day after the trading, and the transaction amount is debited from the investor’s bank account.

The SEBI chief did not explain a timetable or framework for a possible implementation of the new payments infrastructure. However, market participants said such a system would further simplify the process for investors to participate in Indian equities and improve the experience for retail investors.