SEBI issued a circular on Tuesday stating that individual investors applying in IPOs and public offers can use Unified Payment Interface (UPI) for applications up to Rs 5 lakh, from the current limit of Rs 2 lakh per application.
The new guidelines of enhanced limit for UPI based applications for public issues will come into force from 1st May 2022.
The decision was taken after the National Payments Corporation of India (NPCI), the developer of UPI, had given the go-ahead after completing the backtest of the new system. In the circular dated 9th December 2021, the Reserve Bank of India enhanced the per transaction limit on UPI payments from Rs 2 lakh to Rs 5 lakh for the direct retail scheme and IPO applications.
Implementing the mechanism came after a gap as stock exchanges, banks, and other stakeholders had to backtest the new system.
The SEBI’s circular states, “NPCI has reviewed the systemic readiness required at various intermediaries to facilitate the processing of applications with increased UPI limit and confirmed that as of March 30, 2022, more than 80 per cent of SCSBs/Sponsor Banks/UPI Apps have conducted the system changes and have complied with the NPCI provisions,”.
Also, the retail investors should provide their UPI ID in the bid-cum-application form submitted with any of these entities — stockbroker, syndicate member, depository participant and registrar to an issue and share transfer agent.
For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in
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