Sebi has come up with a unique UPI address concept to be registered with market players such as brokers and other intermediaries
The Securities and Exchange Board of India (Sebi) is considering a new initiative to improve the security of payment in the securities market through unified payments. The motivation behind this step is to reduce fraudulent transactions and ensure that all investor payments are routed only through registered market intermediaries.
Unique UPI Addresses For All Market Intermediaries
In a move to ensure safety for all investment funds, Sebi has come up with a unique UPI address concept to be registered with market participants such as brokers and other intermediaries. While this move would reduce fraudulent transactions, for all investors it would ensure the transfer of money into an authorized organization account. Keeping in mind registered intermediaries versus unregistered intermediaries, Sebi expects digital transactions in the stock market to follow transparency guidelines.
Increased UPI Transaction Limits In The Capital Markets
Sebi’s other primary proposal is to increase the daily UPI transaction limit for capital market transactions from Rs 2 lakh to Rs 5 lakh. This will allow traders to make more valuable trades through the UPI system, making investment payment transactions quite smooth. Sebi shall, from time to time, also review this limit so that the same is brought in line with the market requirement in consultation with the National Payments Corporation of India (NPCI).
Advantages And Protections For Investors
Since UPI is one of the most widely used payment modes in India, a secure and verified mechanism for making payments to the capital markets can significantly boost investor confidence. It would also reduce the risk associated with misdirected payments or fraudulent transactions, giving a safer payment method to retail and institutional investors.
Public Consultation And Future Plans
Sebi invited public comments on these proposals and kept an open consultation window till February 21, 2025. Depending on the feedback received, the regulator would fine-tune its proposal and accordingly finalize the change.
Having been passed, the plan would thus become a game-changer in the enforcement of security in digital payment across India's financial ecosystem and investors will be brought full ease of heart knowing they will be trading with full trust and ease.
Public Consultation And The Road Ahead
Though Sebi invited public comments on such proposals, it also kept the window for consultation open till February 21, 2025. Before making the final amendments based on responses, the regulator will fine-tune its plan. If it is approved, the initiative would be a game-changer in reinforcing digital payment security across India's financial ecosystem, and investors would be brought in with greater trust and ease.