Market Regulation Department


February 21, 2006

The Chairman & Managing Director

National Securities Depository Ltd.

Trade World, Kamala Mills Compound,

senapati Bapat Marg, Lower Parel, Mumbai – 400 013.

The Managing Director and CEO

Central Depository Services (India) Ltd.

Phiroze Jeejeebhoy Towers,

Dalal Street, Fort,

Mumbai 400 023.

Dear Sirs,

Sub. : Use of Electronic Clearing System (ECS) for refund in public issues – Instructions for updation of MICR code for refunds through ECS

1.  SEBI vide circular No. SEBI/CFD/DIL/DIP/18/2006/1 dated January 20, 2006 has amended SEBI (DIP) Guidelines, 2000 providing for use of various modes for making refunds in public issues.  A copy of the said circular is available on the SEBI website, namely,

2. It was mentioned in the aforesaid circular that applicants in 15 centers where clearing houses are managed by Reserve Bank of India will get refunds through ECS only and the bank details of such applicants will be taken directly from the database of the depositories in respect of issues made completely in dematerialised form. It is, therefore, necessary that the MICR code maintained at the database of the depositories is updated on a real time basis as and when changes take place to ensure credit of refunds to the bank accounts of the applicants.  For this purpose, DPs have to update the MICR Code and other bank details of the applicants in the database of the depositories.  This is to ensure that the refunds through ECS are made in a smooth manner and that there are no failed/wrong credits.

3.  In view of the above, you are advised to issue suitable instructions immediately to your Depository Participants to comply with the aforesaid requirement.

4. The Depositories are advised to:-

a) make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately, as may be applicable/ necessary;

b)  communicate to SEBI the status of the implementation of the provisions of this circular in the Monthly Development Report.

5.This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market.

Yours faithfully,


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