SEBI proposes unique UPI IDs to curb fraudulent fund collections
SEBI plans to create a unique Unified Payments Interface (UPI) address for collecting money by registered intermediaries. The address will help investors ensure their payments reach only SEBI-registered intermediaries and help them identify and avoid unregistered entities who will not have access to the unique UPI handle.
Subject to further discussions with NPCI, an upper limit of up to ₹5 lakh per day for capital market transactions done through UPI may be set.
“Over the years, many unregistered entities have misled investors by unauthorised collection of money, which is mostly siphoned-off for their personal gains. There is a need to proactively restrict their proliferation and thereby enable investors to identify SEBI registered market intermediaries and make requisite payments to them in a more legitimate, convenient, and efficient way,” the regulator said in a consultation paper on Friday.
A UPI address (UPI ID) typically consists of a username and a handle separated by an “@” symbol. In the proposed mechanism, the username will be an alphanumeric ID generated for the user, while the handle will be a unique identifier linked to the bank of the registered intermediaries.
A thumbs-up icon inside a green triangle will further ascertain that the payments are being made to verified registered market intermediaries, and its absence would caution investors of the risk of making payments to unauthorised entities.
