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A new payment system for initial public offers, which is aimed at not blocking investors' money till shares are actually allotted, will be launched as a pilot by August 10, said the Securities Exchange Board of India on Tuesday.

"Hopefully by end of August, we will start the pilot project," Sebi chairman C B Bhave told reporters on the sidelines of a seminar on financial planning.

Initially, both the existing system of payment for public issues and the new alternate system will co-exist.

"We really don't know how the system works. We need to get used to it. We have to sort out glitches if there are any in the beginning," Bhave said.