Hi Guys !! There has been introduced a new system for blocking money for some special purposes like IPO applications.

UPI (Unified Payments Interface)

UPI is a product of National payments corporation of India which means Unified Payments Interface.

Benefits of IPO application through UPI

1. Reduction in listing timing to 3 working days from closure of issue.

2. Like ASBA money will remain blocked in bank account until allotment process.

3. No bank limitation, like before there was only few banks like ICICI Bank, SBI, HDFC etc.

4. Reduction in Manual Intervention.

5. Increased efficiency

Process of application through UPI

1. Create UPI ID.

2. Enter Bid details in Online IPO Application form.

3. Enter UPI ID and click on submit the form option.

4. Broker will upload bid details to Exchange.

5. Exchange will validate PAN, Demat a/c details with NSDL/CDSL.

6. After validating the details the exchange will forward the details to IPO merchant bankers (Sponsored Bank)

7. Sponsored bank requests the investor to authorize funds blocking.

8. Investor receives notification on UPI app & linked Email ID.

9. Investor confirm/accept UPI request and funds will get blocked.

10. On finalization of basis of allotment, the funds withdrawn from the bank a/c & remaining amount if any will get unblocked.

Implementation Phases

Phase I

From Jan’19 the UPI is optional for Retail category shareholders.

Phase II

From Mar’19 or after 5 mainstream IPO, the UPI system will be mandatory for retail category shareholders.

Phase III – Final Phase

UPI will be mandatory for retail category investors applying upto Rs. 2 Lac for IPO applications. The listing then be reduced to 3 working days from issue closure date.

Now Popular UPI Apps like BHIM UPI, Phonepe and Google Pay are also offering UPI IPO Application.

Would love your thoughts, please comment.x