Opinion How Sebi’s new verified UPI IDs will safeguard investors from cyber frauds

What is the new verified UPI payment mechanism?

With an aim to enhance investor protection and combat unauthorised money collection in the securities market, the Sebi has announced the introduction of a structured and validated UPI address mechanism, featuring the exclusive “@valid” handle for all its registered investor-facing intermediaries.

The validated UPI handle will be exclusively allocated by the National Payments Corporation of India (NPCI) only for payment collection by Sebi-registered intermediaries. The NPCI is the umbrella organisation for operating retail payments and settlement systems in the country, that owns and operates the UPI platform. A mobile-based, 365x24x7 ‘fast payment’ system, UPI enables users to send and receive money instantly using a Virtual Payment Address (VPA) set by the user itself.

Under the new mechanism, the username will be a readable name chosen by the intermediary, followed by a mandatory suffix that clearly identifies their category, Sebi said. While the suffix would be ‘.brk’ for a stock broker, it would be ‘.mf’ for a mutual fund.

The verified UPI handle will feature a unique and exclusive identifier, “@valid”, combined with the name of the self-certified syndicate bank. For example, for a registered broker ABC Ltd, having an account with XYZ bank, the exclusive UPI ID would be: abc.brk@validXYZ.

To ensure easy identification of legitimate transactions, investors will see a clear visual cue, a “thumbs-up inside a green triangle” icon, when making a payment to a registered intermediary through the new UPI handle.

What are the key benefits of the new UPI IDs?

The Sebi said in recent years, unregistered entities have increasingly misled investors by collecting funds without authorisation, often siphoning off these amounts for personal gain. To address this growing issue of impersonation and to enhance investor confidence in the securities market, the markets regulator is launching a new UPI address structure for all its registered intermediaries who collect funds from investors.

The new framework is designed to proactively curb such fraudulent activities, enabling investors to easily identify legitimate Sebi-registered market intermediaries and make payments to them securely and efficiently.

“This innovative mechanism is set to significantly improve the safety and accessibility of financial transactions within the securities market by providing a verified and secure payment channel,” Sebi Chairman Tuhin Kanta Pandey said.

Will the new UPI ID be mandatory for all intermediaries?

The regulator has made it mandatory for all intermediaries to obtain the new UPI IDs. The intermediaries are also required to make investors aware of the new handle and mandatorily offer it as one of the payment options to them.

Is it compulsory for investors to use the new UPI handle only?

For investors, the use of a structured UPI handle will remain optional. Investors can choose their preferred mode of payment, such as UPI, Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), or cheques. If an investor opts to use UPI for the payment to registered intermediaries, then they have to do so using only the new UPI IDs allotted to registered intermediaries.

What will happen to payments done through existing UPI IDs of the intermediaries?

The intermediaries will have to stop accepting payments using the existing UPI IDs post October 1, 2025. To be sure, the existing mode of fund transfer for the ongoing mutual fund systematic investment plans (SIPs) will continue to remain in force to avoid any disruption. However, the new SIPs and renewal or extension of existing SIPs must be done using the new UPI IDs only.

What is the new ‘SEBI Check’ tool?

To provide an additional layer of security and help investors verify the authenticity of an entity before proceeding with any financial transaction, the Sebi is developing a functionality named ‘SEBI Check’.

This will allow investors to verify the authenticity of UPI IDs either by scanning a QR code or by entering the UPI ID manually. The tool will also include a feature to confirm the bank details such as bank account number and Indian Financial System Code (IFSC) of an intermediary.

When will validated UPI IDs and ‘SEBI Check’ become available to users?

The Sebi said the system is currently in development and will be available for use by common investors with effect from October 1, 2025.