Though the official notification to this effect may take a couple of weeks, senior Sebi officials have informed Indian Banks' Association (IBA) of the regulator's decision to allow banks to maintain the principal account for their issues.

"Entities which are registered as `bankers to an issue' and are coming out with their own public or rights issues may act only as `collecting banker' for their own issue and their principal account for the issue purposes shall be maintained by some other bank," the Sebi circular issued last year said while barring banks from acting bankers to their own issues. Even for the purpose of payment of refund warrants, dividend warrants, interest warrants, the principal account shall be maintained with another bank, the directive had said.

TheSebi notification added that in such cases, collecting branches of the issuer bank will transfer the balance in their issue accounts at the end of each working day to the controlling branch of the bank, which in turn will daily transfer the balance in the collection account to the principal account maintained with another bank.

An IBA spokesperson told The Financial Express that the Sebi decision to allow banks to manage this float was prompted by representations made by various banks and the IBA. "Banks are in the primary business of managing money and barring them from maintaining the principal account for their issues denies them an assured business," bankers had told Sebi.

At least one new generation private-sector bank and two public-sector banks -- Times Bank, Syndicate Bank and Oriental Bank of Commerce -- have drawn up plans for their public issues. Two associate banks of State Bank of India are also planing to tap the market to raise their capital adequacy ratio.

While the Times Bankissue is ready to hit the capital market on June 30, Oriental Bank of Commerce plans to reduce the Government's stake in the bank to 51 per cent from 66 per cent through a public issue in the current fiscal.It may be recalled that the stock market regulator has asked stock exchanges to indicate the denomination value of the shares, as fixed by the companies, along with market quotations.