Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity. UPI is built to instantly transfer money between any two parties' accounts.
UPI ID (also called Virtual Payment Address or VPA) is a unique ID for using UPI. The UPI Id can be created by registering with one of the UPI enabled mobile applications (App) using your bank account details.
UPI as a payment mechanism is available for all public issues for which Red Herring Prospectus is filed after January 01, 2019.
Public issue application using UPI is a step towards digitizing the offline processes involved in the application process by moving the same online. This requires you to have to create a UPI ID and PIN using any of the UPI enabled mobile application. The UPI ID can be used for blocking of funds and making payment in the public issue process. You can accept the request to block the funds for the amount you have bid by entering your UPI PIN in the mobile application. The money shall be blocked and shall be automatically remitted to the Escrow Bank, in case of allotment. UPI in public issue process shall essentially bring in comfort, ease of use and reduce the listing time for public issues.
Yes. The existing UPI ID can be used, provided that:
UPI as part of bidding
UPI as part of blocking
UPI as part of payment for shares post allocation process
No. Application forms with UPI as a payment mechanism can only be submitted with, a Syndicate Member, or a Registered Stock Broker, or a Registrar and Transfer Agent or a or Depository Participant (‘Intermediaries’).
The applicability of UPI as a payment mechanism has been prescribed in a Phased manner as under:
Currently limit for IPO application is 2 Lakhs per transaction on UPI.
No. Only retail individual investors are allowed to use UPI for payment in public issues. Qualified Institutional Buyers and High Net-worth Individuals shall continue to apply as per the existing process.
Public issue using UPI may be initiated through any of the intermediaries. The UPI ID can be given to the intermediary with whom the application form is being submitted. All requests for blocking the bid amounts shall be received by you on this UPI ID / App. You would need to enter you UPI PIN to accept the mandate request for blocking the amount.
The application form for an IPO, now also includes a field for entering your UPI ID as a payment mechanism. Further, you can get in touch with any of the Intermediary who shall be able to guide you on the process in detail.
No. The option to bid for a public issue from UPI application is presently not available. Presently, the application is only available for blocking and payment of funds in public issues.
In case your bank is not providing UPI services for public issues, you may make use of your bank account for blocking of funds and depending upon the Phase (I, II or III) in which the application is being made, submit the application with the respective SCSB or intermediary for the purpose of blocking of funds.
No. In order to use UPI for payment, the bank where you hold an account linked to your UPI ID also needs to be eligible to act as an Issuer Bank in the public issue process. The list of such bank is available on website of SEBI at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40
There is no restriction for you on the number of public issues using the same UPI ID.
No. Applications made by retail investors using third party UPI ID or by any category of investors using a third party bank account will not be considered for allocation.
SEBI Circular only specifies that applications made by retail investors using third party UPI ID or by any category of investors using a third party bank account are liable for rejection. No specific restriction has been imposed by SEBI on use of bank account by second / third/ joint account holder.
Yes. Once the bid details are uploaded on the stock exchange platform, the stock exchange shall send an SMS to you regarding bid of your application, on end of day basis. For the last day of bidding, the SMS may be sent out the next working day.
Investor should first approach the intermediary to whom the application was submitted. For complaints with respect to blocking / unblocking of funds, investor may approach the bank. For complaints with respect to non-allotment of shares, investor may approach registrar to issue. If the investor is not satisfied with the response, investor can approach the stock exchange. In case, where an investor is not satisfied with the response of any of the intermediaries, investors may submit a complaint with SEBI.
FAQs on scenarios that may arise during blocking of funds using UPI in the public issue process - Creation / modification / cancellation / execution of bid and corresponding block request (mandate):
In such a case, you may approach the same intermediary with whom the application was submitted for re-initiating the process. You may also like to check whether the UPI ID recorded is correct or not.
In such a case, the transaction will not get initiated or may get initiated to wrong UPI ID. The transaction needs to be re-initiated as a new request post submission of correct UPI ID.
In case the request is erroneously declined by you, the transaction will be declined and you will have to initiate a fresh request. The transaction can be re-initiated by approaching the intermediary with whom the application form was submitted.
The transaction will be declined with ‘Wrong UPI PIN’ and you will have to re-initiate the transaction. The transaction can be re-initiated by approaching the same intermediary with whom the application form was submitted.
In case of a technical decline, the transaction can be re-initiated by approaching the intermediary with whom the application form was submitted.
Yes. As per the indicative activity wise timeline prescribed in the SEBI guidelines, all block requests which have not been acted upon by 12:00 p.m. on T+1 day i.e. one day after closure of the issue, would lapse.
The block request is not fraudulent in case the UPI ID is marked as a “verified merchant”. Please look out for the indication of a Verified Merchant tag when you receive the request on your App for blocking the amount that you have bid. The request is received as a collect request on your UPI enabled App. Further, also please verify the details including your Bid-cum application number, amount and other bid details, enclosed as an attachment as part of such block request.
The amount will be blocked till the finalization of allotment, post which the amount equivalent to allotted shares would be debited and balance amount (in case of partial allotment) will be unblocked.
In such a case, you can raise a complaint with the bank with the respective Unique Mandate Number provided for the block request.
The status of the active requests can be viewed in the Mandate section of your UPI app.
The default account is independent of the block request. The execution will happen against the same account for which the UPI PIN was entered by you at the time of accepting the block request.
De-registration will not be available from the application until the active requests are revoked / executed.
Transaction will be declined in case the account has insufficient funds.
While the UPI framework supports both mandate creation as well as execution on a holiday, the uploading of bids in a public issue happens only on working days as defined in SEBI guidelines. Accordingly, you may not receive a mandate request on a holiday. However, such mandate requests which are pending in your app can be acted upon by you on a holiday.
Yes. The same UPI PIN can be used to accept a block request for public issue application.
UPI PIN is required only once at the time of confirmation of the request.
In such a case, customer should reach out to their bank with the Unique Mandate Number (UMN) for the respective block request.
Execution of the block request is independent of the UPI ID and will be executed against the same account which was used at the time of creating the request.
No, the values in the block request cannot be modified. Any modification to the bid details, including the amount, has to be undertaken by approaching the intermediary with whom the application form was submitted. Upon modification of bid amount by the intermediary, you will received a fresh block request with revised amount, which needs to be again authorised by entering your UPI PIN.
All modification requests initiated within the prescribed time can been acted upon by 12:00 p.m. on T+1 day i.e. one day after closure of the issue.
In such a case, you need to initiate a fresh modification request. The transaction can be re-initiated by approaching the intermediary with whom the application form was submitted.
Yes, the customer will receive notification on mobile application as well as SMS for authorising the modification request.
Post the expiry time of the request / mandate, the modification request would lapse and the execution will take place based on the earlier approved request / mandate which is active.
Once the successful modification is done, a confirmation shall be given by the mobile application.
Execution of the mandate is independent of the said change and will be executed against the same account which was linked at the time of creating the mandate irrespective of the fact that the UPI ID was changed at a later stage
As per the extant legal framework, retail individual investors can withdraw bids till issue closure date. During the bidding period you may approach the same intermediary with whom the application form was submitted, for withdrawal of bid.
Revoking a mandate request is cancelation of a block request pursuant to cancellation of an IPO bid.
A mandate request once created can be revoked till closure of the issue. The revoke can be initiated through the intermediary with whom the application was submitted.
In such a case, you would need to re-initiate the revoke request. Such re-initiation can be done through the intermediary with whom the application was submitted.
Once the revoke request is submitted successfully, the mobile application will provide a success notification.
For block created for IPO, the customer shall not an option to revoke the block from the app, he/she will have to approach the intermediary to whom the application was submitted. For revoking the mandate transaction customer need shall not be required to enter the UPI PIN.
On revoking the mandate request, the bid amount will be immediately unblocked in your bank account.
The money in your account will be unblocked in case the allotted shares are less than the bid quantity or in case of revocation of a block request wherein you have not received any allotment.
In case you do not get any share allotment, the amount blocked in your account will be unblocked.
In case of part allocation, money will be debited for the allocation value and the residual amount will be unblocked / reinstated to your account.
In case the shares have not been allotted to you and money is not unblocked / reinstated in your account, you may raise a complaint through the UPI App or approach your bank / the intermediary with whom the application was submitted.
In case the shares have not been allotted and money is debited from your account, you may raise a complaint with your application details, either from the UPI App or approach your bank / the intermediary with whom the application was submitted.
Allotment of the share will be done as per the timelines prescribed in SEBI Circular dated November 01, 2018 available at https://www.sebi.gov.in/legal/circulars/nov2018/streamlining-the-process-of-public-issue-of-equity-shares-andconvertibles_40923.html
Under the UPI framework, you will be notified of the debit of funds from your account. However, the process of communicating the share allotment process shall be separate, as per the extant process.
Your money shall be unblocked / reinstated to your account with the expiry of the mandate period in case shares are not allotted to you.
In case amount more than allotment is debited, you may raise a complaint from the UPI App or bring the issue to the knowledge of your bank through any other mode against the Unique Mandate Number (UMN).
Execution of the mandate is independent of the default account and will be executed against the same account which was linked at the time of creating the mandate.
Execution of the mandate request is independent of the UPI ID and will be executed against the same account which was linked at the time of creating the mandate.
You may refer to the SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 01, 2018 available on SEBI website at www.sebi.gov.in under the categories “Legal” and “Circulars” for more information, https://www.sebi.gov.in/legal/circulars/nov2018/streamlining-the-process-of-public-issue-of-equity-shares-andconvertibles_40923.html
You can also refer to the NPCI for basic information and member involved in the IPO process https://www.npci.org.in/what-we-do/ipo/product-overview