Market regulators, securities and exchange boards of India, on Friday came up with investors’ proposals, which were able to make transactions with registered institutions such as brokers through UPI. The regulator has proposed that such transactions will not be facilitated with unregistered institutions and investors will be saved from fraud elements.
Additionally, the market regulator has proposed to increase the upper limit on UPI-facilitated capital market transactions. 2 lakhs to Rs. 5 lakhs. It is subject to further consultation with the National Payment Corporation of India.
The regulator has also swimmed the idea of ​​using @Payright as a UPI handle suitable for this purpose.
The new system has been proposed to include SEBI, NPCI, banks and registered middlemen.
According to the SEBI counseling paper, NPCI has confirmed that issuing new UPI handles is a regular process for them, and banks are already equipped to integrate these new handles. Once the NPCI enables the system, middlemen will be able to get their new UPI ID from their respective banks. The allocation process will be OTP-based, which ensures security and verification through SI portal of SEBI.
In addition, to facilitate the system, all stakeholders must complete certain tasks. First, being a broker and mutual funds, investor-affected middlemen, it is proposed to update their mobile number and email ID in the SEBI portal. Post it, they have to get a new UPI ID from their bank and start using it.
After this, they have to inform investors about the new UPI system through email, SMS, websites and social media and ensure that the current mutual funds continue without SIP disintegration, but updated the new SIP of UPI ID Should be used.
On the other hand, self-attested syndicate banks (SCSB) should verify middlemen using SEBI certification system before issuing UPI ID. They will also have to conduct proper hard work and only verified institutions will have to allocate UPI ID.
Meanwhile, the market infrastructure institutes (MII) should conduct awareness campaigns to educate investors about the new payment mechanisms.
The suggestions are open for public consultation till 21 February.
