NPCI launches ASBA-like facility for secondary market

Set 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 app providers, NPCI said in its statement.

“Initially, this functionality will be available for limited set of pilot customers,” it added.

ASBA-like facility of ‘Trading supported by blocked amount in secondary market’ through block mechanism was approved by the market regulator Sebi, based on the Reserve Bank of India approved facility of single-block-and-multiple-debit 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 upon trade confirmation during settlement. Clearing corporations will directly process payouts to these clients on a T+1 basis – which means any trade-related settlements must be completed within one day from the day of the transaction.

This beta launch is facilitated by brokerage app Groww, and UPI apps such as BHIM, and Yes Pay Next. Initially, HDFC Bank and ICICI Bank customers can avail of this facility. 

HDFC Bank, HSBC, ICICI Bank, and Yes Bank are serving as sponsor banks for the clearing corporation and exchanges.

Other stakeholders, including stockbrokers such as Zerodha, banks like Axis Bank and Yes Bank, and UPI apps like Paytm and PhonePe are in the certification stage and set to participate in beta launch soon.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 29 Dec 2023, 07:27 PM IST