An employee use a payment terminal at a supermarket in the Kurla area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

SEBI Extends Phase-I Implementation Of UPI For Retail IPO Investors

The Securities and Exchange Board of India extended the timeline for the implementation of phase-I of Unified Payments Interface as an alternative payment mechanism for retail investors buying shares in a public issue.

To ensure smooth transition to UPI in Application Supported by Block Amount and against the backdrop of the representation received from various stakeholders, the market regulator said, "It has been decided to extend the timeline for implementation of phase-I... by three months i.e. till June 30.”

However, the timeline for implementing phase-II and phase-III shall remain unchanged from the date of completion of phase-I, the market regulator said in a circular.

In November 2018, the regulator had said it would launch UPI as an alternative payment option for retail investors buying shares in a public issue in a phased manner from Jan. 1, 2019, which will cut listing time for an initial public offering to three days from the existing six days.

It had further said the new mechanism would increase the efficiency of the existing system and curtail the need for manual intervention.

Currently, retail investors either invest in an IPO through bank ASBA or through broker ASBA, where the broker does the bidding and hands over the application form to the investors' bank.

With the UPI mechanism, the existing process of physical movement of forms from intermediaries to banks for blocking of funds will be discontinued.

UPI is an instant payment system developed by the National Payments Corporation of India. It allows instant transfer of money between any two persons' bank accounts using a payment address which uniquely identifies a person's bank account.

Also read: RBI Cautions Against Fraudulent Transactions On UPI Platform