A new payment system for Initial Public Offers that is aimed at not blocking investors' money till share are actually allotted will be launched as a pilot by August 10, stock market regulator SEBI said 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.