NPCI Launches UPI for Secondary Market, Beta Phase Goes Live

The National Payments Corporation of India (NPCI) has launched “UPI for Secondary Market”, and the beta phase of the initiative has gone live. UPI for Secondary Market is an Application Supported by Blocked Amount (ASBA) like facility, which is basically 'Trading supported by blocked amount in Secondary Market’. This facility has currently been made available only for a limited set of pilot customers.

In this trial phase, investors have the option to reserve funds in their bank accounts, and these funds will only be deducted by the Clearing Corporations once trade confirmation is established during the settlement. The Clearing Corporations will then directly handle payouts to these clients on a T+1 basis.

What is the ASBA-Like UPI for Secondary Market?

ASBA is basically a request submitted by an investor. It includes permission for the Self-Certified Syndicate Bank (SCSB) to reserve funds in the applicant's savings bank account or current account, excluding overdraft or loan account. This reservation is for the purpose of subscribing to a particular Issue, up to the amount of application money. The blocking of funds remains in effect until the finalization of allotment in the issue, withdrawal or failure of the issue, or  the withdrawal or rejection of the application based on the issue at hand.’

The block mechanism has been approved by SEBI, based on the RBI approved facility of single-block-and-multiple-debit in UPI. This facility has gone live in its beta phase in the equity cash segment, and collaborative assistance has been sought by the NPCI from essential partners, such as clearing corporations, stock exchanges, depositories, stockbrokers, banks, and providers of UPI apps.

Organisations that are Supporting the Beta-phase of UPI for Secondary Market

The Beta launch is being facilitated by Groww, which is acting as the brokerage app, in conjunction with BHIM, Groww, and YES PAY NEXT serving as UPI apps. The facility is initially being made available to customers of HDFC and ICICI banks. Additionally, the following banks are acting as the sponsors for the clearing corporation and sponsors:

• HDFC Bank
• HSBC
• ICICI Bank
• Yes Bank

Some of the other platforms where the facility will be made available soon are as follows:

• Stockbrokers’ platform Zerodha.
• Axis Bank.
• Yes Bank.
• PayTm.
• PhonePe.