How To: Give users SFTP access while not having shell access
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Well, although most tend to believe you can’t, there is actually a way, it’s not officially supported in cPanel yet, but it does work.

First, create the user like normal, and give them Shell access. Now, using the command usermod you will change the users shell :

#usermod -s /usr/libexec/openssh/sftp-server username

Of course, changing the last “username” field to whatever the username is.

This path is correct on Redhat 7.3, but you might want to do:

#locate sftp-server

This will tell you the definite location of this application.

Now, your users will be able to use SFTP without a problem, they will also be able to SSH in, but as soon as they issue a command, it will boot them out (as it’s just the SFTP server)

Note: Although this is used by some, it’s not an official method, and cPanelFAQ.org does not know if any security risks are involved in this procedure