Answer
No, since 1st May 2022, as per SEBI rules, you usually cannot use your personal savings bank account to apply for an IPO on behalf of your friends or family.
Why is this restricted?
SEBI has strict rules now:
- Bank Account Must Match Demat Account: The person whose name is on the bank account must be the same person whose name is on the demat account (where the shares will be credited).
- Unique PAN is Key: Every IPO application needs a unique PAN and a demat account linked to that specific PAN.
- UPI Linkage: If you use UPI (which is the most common way now), the UPI ID must also belong to the person applying for the IPO.
Using a bank account that belongs to a third party (not the applicant) will most likely lead to the rejection of the IPO application.
Are there any exceptions?
- Bank Specific Exceptions: A few banks, like SBI, Axis, or RBL, sometimes allow using one account for multiple applications if the applicant’s PAN is correctly used. However, this is not common practice across all banks.
- Minor/HUF Accounts: Some specific banks (like HDFC) permit applications for immediate family members if the accounts are for a Minor (child) or a HUF (Hindu Undivided Family).
- The best advice is: Your family members must use their own bank accounts to apply to make sure their application is not rejected.