The National Payments Corporation of India (NPCI) officially launched ‘UPI for Secondary Market,’ easing equity trading in the country. The initiative, approved by the Securities and Exchange Board of India (SEBI) is based on the RBI-approved single-block-and-multiple-debit facility in UPI, that represents a significant step towards a more streamlined and efficient financial environment.
The start of the beta phase in the equity cash section is signalled by the launch. The National Payments Corporation of India (NPCI) has worked with major players such as clearing organisations, stock exchanges, depositories, stockbrokers, banks, and UPI app developers. The feature will first be accessible to a small number of pilot customers.
Investors can block funds in their bank accounts throughout the live phase, with clearing organisations debiting these amounts only upon trade confirmation during settlement. This novel technique accelerates the process by requiring clearing organisations to execute payouts directly to clients on a T+1 basis.
This innovative approach gives investors greater control over their investments by allowing them to restrict funds in their bank accounts, reducing risks. Clearing firms that debit money exclusively on trade confirmation during settlement not only speed up the settlement cycle, but also assure a secure and transparent process. The implementation of UPI in the secondary market is a big step towards a more transparent and investor-friendly trading environment.
Groww, which acts as the brokerage app alongside UPI apps like BHIM, Groww, and YES PAY NEXT, is facilitating the test launch. Customers of HDFC Bank and ICICI Bank are among the first to benefit from this innovative service. Notably, the clearing organisation and exchanges are sponsored by HDFC Bank, HSBC, ICICI Bank, and Yes Bank.
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