SEBI Launches “@valid” UPI IDs

Securities and Exchange Board of India (SEBI):

1. Regulatory Authority: SEBI is the chief regulator of the Indian securities market.
2. Objective: Protect investor interests, promote orderly market growth, and ensure transparency and fairness in financial transactions.
3. Formation:
   1. Initially established in 1988 as a non-statutory body.
   2. Gained statutory status through the SEBI Act, 1992.

Unified Payments Interface (UPI):

1. It is a real-time digital payment system enabling instant bank-to-bank transfers using mobile devices.
2. Launched by: National Payments Corporation of India (NPCI) in 2016.
3. It helps to promote digital payments and reduce cash usage.

National Payments Corporation of India (NPCI):

1. Established in 2008 to develop a secure and efficient payment infrastructure for India.
2. Revolutionized digital payments by introducing innovative systems that promote a cashless economy.
3. Enhanced financial inclusion, making banking and digital transactions accessible to more people.

Self-certified Syndicate Bank:

1. Authorized by SEBI to process IPO applications using the ASBA system.
   1. Initial Public Offering (IPO): When a private company sells shares to the public for the first time, allowing investors to buy ownership in the company.
   2. Application Supported by Blocked Amount (ASBA): A system where investors apply for IPOs without paying upfront—their money stays blocked in their bank account until shares are allotted.
2. Allows investors to apply for IPOs without transferring funds immediately—money stays blocked in their account until allotment.
3. Ensures a secure and efficient IPO application process, reducing refund delays.

Systematic Investment Plans (SIP):

1. SIP is a method of investing in mutual funds by contributing a fixed amount at regular intervals (monthly, quarterly, etc.).
2. Helps investors build wealth gradually without needing a large lump sum investment.

Challenges

Way Forward

1. Low adoption by small intermediaries

Provide technical support and a simplified onboarding process for all intermediaries.

2. Lack of investor awareness about @valid handle

Launch multilingual awareness campaigns via TV, print, apps, and financial influencers.

3. Language and accessibility barriers

Use symbols (like green triangle) and vernacular content to reach the non-English population.

4. Risks during transition period (till Dec 2026)

Strict deadlines, phased migration, and frequent reminders to investors and intermediaries.

5. Over-reliance on NPCI for infrastructure

Explore creating backup systems or cross-verification mechanisms in collaboration with SEBI.

6. Possibility of fraud in dual-ID phase

Implement real-time fraud tracking and flagging of non-validated UPI handles.

Ensure IAS Mains Question:

Q. Discuss the significance of SEBI’s “@valid” UPI handle initiative in strengthening investor protection and digital payment security in India’s financial markets. (150 words)

Ensure IAS Prelims Question:

Q. With reference to SEBI’s upcoming “@valid” UPI system, consider the following statements:

1. It will be mandatory for all SEBI-registered intermediaries collecting payments from investors.
2. The “@valid” UPI handles can be created by any bank or intermediary.
3. A green triangle with a thumbs-up symbol will indicate a valid payment.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer: c

Explanation:

Statement 1 is correct: SEBI has mandated that all registered intermediaries, including brokers and mutual funds, must use the “@valid” UPI handle for collecting payments from investors.

Statement 2 is incorrect: The National Payments Corporation of India (NPCI) will issue these handles only to SEBI-registered intermediaries after verification.

Statement 3 is correct: A valid payment will show a thumbs-up symbol within a green triangle to ensure awareness among the non-English speaking population.