Mumbai: The Securities and Exchange Board of India (SEBI) has proposed a system to enhance payment security in the securities market by introducing unique Unified Payments Interface (UPI) IDs for registered market intermediaries. This initiative aims to help investors identify legitimate entities and avoid fraudulent ones.
Key Highlights:
Unique UPI IDs for Intermediaries: SEBI suggests assigning a distinct alphanumeric UPI ID to each registered market intermediary. This measure is designed to assist investors in verifying the authenticity of the entities they transact with, thereby reducing the risk of fraud.
Visual Verification Feature: A proposed feature includes displaying a “thumbs-up” icon within a green triangle when payments are made to verified intermediaries. The absence of this icon would serve as a caution to investors about potential unregistered entities.
Increased UPI Payment Limit: SEBI plans to raise the UPI payment limit for capital market transactions to ₹5 lakh per day, up from the current ₹2 lakh limit. This adjustment will be periodically reviewed in collaboration with the National Payments Corporation of India (NPCI).
Public Consultation: A consultation paper detailing these proposals has been released, with SEBI inviting public comments until February 21.
Background:
Since 2019, UPI has been an approved payment method in the securities market. However, there has been a rise in incidents involving unregistered entities misleading investors and fraudulently collecting funds. The proposed measures aim to address these concerns by leveraging technology to enhance trust and security in financial transactions.
SEBI Chairperson Madhabi Puri Buch highlighted the importance of integrating technology with trust. She emphasized that the “Pay Right” initiative will enable investors to verify the authenticity of UPI IDs through robust Know Your Customer (KYC) procedures, thereby combating digital fraud and reinforcing investor confidence in the digital ecosystem.
The implementation costs for this system are expected to be minimal, involving collaboration between SEBI, NPCI, banks, and registered intermediaries. This initiative is currently under discussion with various stakeholders, including the NPCI.
By introducing these measures, SEBI aims to strengthen the integrity of financial transactions in the securities market and provide investors with tools to make informed and secure payments.
