The Securities and Exchange Commission on Tuesday made it mandatory for bankers to a public issue to refund IPO funds by directly crediting the applicants' bank account from now. This, it said, would not only stop the use of fake bank account numbers in IPOs, but also expedite the refund process.

At present, the 'issue manager' distributes refundwarrant certificates that are encashed by applicants by depositing these in their bank accounts.

The SEC had, on a pilot project, asked the issue manager of Fidelity Assets and Securities Company to deposit the refund warrants in the applicants' bank accounts with two particular banks, National Bank and First Security Bank. During the process, it discovered 151 fake bank account numbers in the IPO (initial public offering) applications.

It was alleged that one individual submitted several IPO applications with fake or fictitious bank account numbers, and later encashing the refund warrants in collusion with a section of bank officials.

The watchdog has decided to arrange for another experimental distribution of refund warrant certificates for the Delta Brae Housing IPO process. The SEC has already asked the issue manager of Delta Brae to deposit refund warrants to the IPO applicants' bank account numbers with four particular banks.