National Payments Corporation of India (NPCI) has announced the launch of an ASBA-like facility in the secondary market.
To begin next week in its beta phase for the equity cash segment, the ‘UPI for Secondary Market’ initiative is supported by key stakeholders, including clearing corporations, stock exchanges, depositories, stockbrokers, banks and UPI application providers, NPCI said in its statement. .
“Initially, this feature will be available to a limited set of pilots,” it added.
An ASBA-like facility of “Trading backed by a blocked amount in secondary market” through a block mechanism has been approved by the market regulator Sebi, based on the Reserve Bank of India’s approved single-block-and-multiple-debit facility in UPI, with the implementation timeline of 1 January 2024.
During this pilot, investors can block funds in their bank accounts, which will only be debited by the clearing corporations after business confirmation during settlement. Clearing corporations will directly process payments to these clients on a T+1 basis – which means that all trade settlements must be completed within one day of the day of the transaction.
This beta launch is facilitated by brokerage app Groww, and UPI apps like BHIM and Yes Pay Next. Initially, HDFC Bank and ICICI Bank customers can avail this facility.
HDFC Bank, HSBC, ICICI Bank, and Yes Bank act as sponsor banks for the clearing corporation and exchanges.
Other stakeholders, including stock exchanges like Zerodha, banks like Axis Bank and Yes Bank, and UPI apps like Paytm and PhonePe are in the certification stage and will participate in beta launch soon.
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Published: 29 Dec 2023, 19:27 IST