1. What is UPI?
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 over the IMPS (Immediate Payment Service) infrastructure and allows you to instantly transfer money between any two parties' bank accounts.
2. What is a UPI ID?
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.
3. How “UPI as a payment option” can be used in the public issue process”?
UPI as part of bidding
Investor will fill in the bid details in the application form as per the existing process along with his UPI ID and submit the application to the stock broker who on receipt of application will upload the bid details along with UPI id in the stock exchange bidding platform
With Tradeplus you can place your bid by yourself by logging into your portal in our website www.tradeplusonline.com. Alternatively you can email to support@tradeplusonline with the details of public issue name, your investment amount, UPI id. Our IPO team will upload the bid in the stock exchange bidding platform.
The stock exchange will electronically share the bid details, along with investors UPI id, with the Escrow/Sponsor Bank appointed by the issuer company.
UPI as part of blocking
The Escrow / Sponsor Bank will initiate a mandate request on the investor i.e. request the investor to authorize blocking of funds equivalent to applicant amount and subsequent debit of funds in case of allotment.
The request raised by the Escrow/Sponsor Bank, would be electronically received by the investor as SMS/intimation on his / her bank provided mobile no. linked to UPI ID.
Upon validation of block request by the investor, the said information would be electronically received by the investors’ bank, where the funds, equivalent to application amount, would get blocked in investors account. Intimation regarding confirmation of such block of funds in investors account would also be received by the investor.
In the case of investor being allotted in the public issue, based on authorization given by investor using UPI PIN at the time of blocking, the funds, equivalent to the allotment, would be debited from investors account and remaining funds, if any, would be unblocked.
Below are the illustration of aforesaid process presented graphically and as snapshot.
IPO application screen with Tradeplus
On Submitting the IPO application you will receive email confirmation from BSE about your application. You then need to accept the block request on your UPI APP as shown below
Block request intimation through UPI application
Investor UPI application screen
Post verification of details above
4. Up to what limit can I apply for a public issue in UPI?
The limit for IPO application is 2 Lakhs per transaction on UPI.
5. Are all category of investors eligible to apply in public issues using UPI for payment?
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.
6. Can I use third party UPI ID or a third party bank account for making payment in public issues?
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.
7. Are second / third / joint account holders in a bank account restrained from using the same account for payment in public issues?
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.
FAQs on issues arising when using UPI in the public issue process
Scenario 1 - Creation of a block request (mandate)
8. What happens if I don’t get a block request from the intermediary on the UPI id that was entered in the application form?
In such a case, you may approach the same intermediary with whom the application form was submitted for re-initiating the process. You may also like to check whether the UPI ID recorded is correct or not.
9. What if there is an inadvertent error while entering the UPI ID?
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.
10. What if I erroneously decline the request to block funds?
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.
11. What if I input wrong UPI PIN while authorizing the block request?
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.
12. What if I get a technical error on the UPI App while accepting the block request?
In case of a technical decline, the transaction can be re-initiated by approaching the intermediary with whom the IPO application was submitted.
13. Is there any timeline by which I need to act upon the block request?
Yes. As per the indicative activity wise timeline prescribed in the SEBI Circular dated November 01, 2018, in Phase I, all block requests which have not been acted upon by 12:00 p.m. on T+2 day i.e. two days after closure of the issue, would lapse. In Phase II, all block / collect 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.
14. How do I know that the block request is not fraudulent?
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.
15. What if my amount is blocked twice for a single block request?
In such a case, you can raise a complaint with the bank with the respective Unique Mandate Number provided for the block request.
16. Where can I check the status of an active requests on my UPI App?
The status of the active requests can be viewed in the Mandate section of your UPI app.
17. What happens if I change my default account after accepting the IPO mandate / blocking request?
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.
18. What happens if I de-register from the UPI App after accepting the block request?
De-registration will not be available from the application until the active requests are revoked / executed.
19. What happens if I do not have sufficient balance in my bank account while accepting the block request?
Transaction will be declined in case the account has insufficient funds.
20. Will I receive a block request for public issues on holidays? Will the request be processed successfully on holidays?
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 Circular dated November 01, 2018. 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.
21. Can I use the existing UPI PIN for accepting the block request?
Yes. The same UPI PIN can be used to accept a block request for public issue application.
22. How many times do I need to input UPI PIN for creating and processing the block request?
UPI PIN is required only once at the time of confirmation of the request.
23. To whom should I approach if I face issues with the block request? My bank or through my mobile / PSP app?
In such a case, customer should reach out to their bank with the Unique Mandate Number (UMN) for the respective block request.
24. What happens if I change my UPI ID after my amount is blocked for IPO?
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.
Scenario 2 - Modification of a block request (mandate)
25. Can I modify the parameters, like bid quantity, price, amount, etc., when I receive a block request in public issues?
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 receive a fresh block request with revised amount, which needs to be again authorized by entering your UPI PIN.
26. Till what time I can authorize the modification request?
In Phase I, all modification requests initiated within the prescribed time can be acted upon by 12:00 p.m. on T+2 day i.e. two days after closure of the issue. In Phase II, all modification requests initiated within the prescribed time can be acted upon by 12:00 p.m. on T+1 day i.e. one day after closure of the issue.
27. What if I get a technical error on the UPI App while modifying the IPO request?
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.
28. Will I be prompted to authorize the modified request?
Yes the customer will receive notification on mobile application as well as SMS for authorizing the modification request.
29. What happens if I do not authorize 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.
30. How do I know that my modification mandate request is successful?
Once the successful modification is done, a confirmation shall be given by the mobile application.
31. What happens if I change my UPI ID after modification of mandate request?
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.
Scenario 3 – Cancellation / revocation of a block request (mandate)
32. What if I do not want to proceed with the public issue application after submission with intermediary? Can I withdraw my bid? If yes, how?
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.
33. What does revoking a block request mean?
Revoking a mandate request is cancellation of a block request pursuant to cancellation of an IPO bid.
34. Till when can I revoke a block request?
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.
35. What happens if revoking of a block request fails due to technical error?
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.
36. How do I know if my block request is revoked successfully?
Once the revoke request is submitted successfully, the mobile application will provide a success notification.
37. Do I need UPI PIN for revoking a block / mandate request?
Yes, you will need the UPI PIN to revoke the request.
38. What happens if a block / mandate is revoked after the successful block?
On revoking the mandate request, the bid amount will be immediately unblocked in your bank account.
39. In what scenarios will my funds be unblocked?
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.
Scenario 4 – Execution of a block request (mandate)
40. What happens if I do not get any shares but my money remains blocked?
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 / RTA / the intermediary with whom the application was submitted.
41. When will the allotment of shares be done after I have approved the block request?
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/nov-2018/streamlining-the-process-of-public-issue-of-equity-shares-and-convertibles_40923.html.
42. Will I be notified when the shares will be allotted?
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, and you will directly receive an email communicating the allotment, if any from BSE whose IPO API's we use.
43. What if more money is debited than the allocated shares?
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.
48. Where can I get more details about this process?
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/nov-2018/streamlining-the-process-of-public-issue-of-equity-shares-and-convertibles_40923.html.