Sebi hopes to develop a new system that would guarantee safe and effective payments in the securities market while separating trustworthy financial institutions from dishonest ones through the Unified Payments Interface (UPI). To make it simpler for investors to verify that they are only paying registered businesses, the regulator has recommended giving registered market intermediaries a unique UPI address under the proposed method.
The present Rs 2 lakh UPI payment limit for capital market transactions is to be surpassed by the projected Rs 5 lakh daily ceiling. The National Payments Corporation of India (NPCI) would be consulted during periodic evaluations of this.
A consultation document on the suggestions was released by the Securities and Exchange Board of India (Sebi) on Friday, and the public was asked to respond by February 21.
Sebi has allowed UPI to be used as a payment method in the market since 2019. However, unregistered organizations deceiving investors and fraudulently collecting money has become a major problem.
Sebi has suggested giving each registered intermediary a distinct alphanumeric UPI ID in order to remedy this.
“This unique UPI address will help investors ensure that their payments are reaching only to registered intermediaries. As a corollary, this would also help investors identify, isolate and avoid unregistered entities, who will not have access to this unique UPI handle,” Sebi said.
Furthermore, when payments are made to certified intermediaries, a unique “thumbs-up” emblem inside a green triangle will show up. Investors will be alerted to the possible dangers of funding unauthorized companies if the icon is absent.
As the procedure entails cooperation between Sebi, NPCI, banks, and registered intermediaries, the implementation costs of this system are anticipated to be minimal.
The NPCI is among the stakeholders with whom this idea is being explored. Madhabi Puri Buch, the chairman of Sebi, gave an explanation of the proposed “Pay Right” program earlier on Friday at an event hosted by ICAI.
With the help of this effort, investors will be able to do thorough KYC (Know Your Customer) due diligence and confirm the legitimacy of the UPI ID they are sending money to. In order to ensure that investors may be sure they are paying to the right people, this approach is intended to counteract the rising threat of digital fraud.
Buch emphasized the significance of combining technology with trust, stating that this new measure will strengthen investor confidence in the digital economy and assist differentiate trustworthy financial intermediaries from scammers.
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