UPI system glitch: Sebi knocks on NPCI’S door
The Securities and Exchange Board of India (Sebi) has encountered glitches in its newly introduced payment mechanism for retail investors applying in public issues. It is in talks with the Reserve Bank of India (RBI)regulated National Payment Corporation (NPCI), seeking resolution of the matter.
According to Sebi sources, the regulator has received hundreds of complaints from investors who failed to participate in the Indian Railway Catering and Tourism Corporation (IRCTC) and Affle India IPOS.
“It is more of a conceptual than technical issue, and registered banks are required to take steps for smooth functioning,” said a person privy to the development.
Earlier this year, Sebi had mandated all retail investors to make payments through the Unified Payments Interface (UPI) route. The move was to cut the time of
an IPO process to three days from six at present.
Until recently, investors could invest in a public issue through the ‘application supported by blocked amount’ (ASBA) facility, which usually takes at least six days to process the IPO application.
Under the new payment system, an investor will have to enter his/her UPI ID on the application form.
When the form is processed by the concerned bank and the registered transfer agent, an investor receives a notification on the BHIM UPI app or the bank’s native application, allowing him/her to use UPI.
While providing the pin, this approves the blocking of the amount.
After the bidding process, the remaining amount over and above the shares that were allotted will be unblocked.
This cycle gets completed in three days. People in the know said there are still several banks that have not geared up to process UPIbased applications for IPOS. This is resulting in the rejection of several applications.
Several investors were irked for failing to get allotment in the IRCTC issue.