In a bid to distinguish legitimate financial intermediaries
from fraudsters, the Securities and Exchange Board of India (Sebi) is looking
to come out with a new mechanism to ensure secure and efficient payments in the
securities market through Unified Payments Interface (UPI). Under the proposed
mechanism, the regulator has suggested creating a unique UPI address for
registered market intermediaries, making it easier for investors to confirm
that they are paying only registered entities. The proposed UPI payment limit
for capital market transactions is set to Rs 5 lakh per day, higher than the
current Rs 2 lakh limit. This will be evaluated periodically in consultation
with National Payments Corporation of India (NPCI).
Sebi has floated a consultation paper on the proposals on
January 31 and sought public comments on them by February 21. Since 2019, Sebi
has enabled UPI as a mode of payment in the market. However, there has been a
growing issue with unregistered entities misleading investors and collecting
money fraudulently. To address this, Sebi has proposed to creating a unique
alphanumeric UPI ID for each registered intermediary.
The regulator said ‘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’. Further, a special ‘thumbs-up’ icon inside a green triangle will appear when payments are made to verified intermediaries. If the icon is missing, it will warn investors about potential risks of paying unauthorised entities. The costs of implementing this system are expected to be low, as the process involves collaboration between Sebi, NPCI, banks, and registered intermediaries. This initiative is being discussed with various stakeholders, including the NPCI.
Source: Ace Equity
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