HDFC Bank goes live with NPCI-developed UPI in secondary market platform

HDFC Bank has executed transactions via the NPCI's UPI payments app as part of the 'UPI for secondary market' facility, which which went live on Monday, the lender said in a statement.

The move follows markets regulator Sebi allowing the facility through the UPI app developed by the National Payment Corporation of India (NCPI).

Effective January 1, Sebi and the stock exchanges permitted trading in the cash segment through block mechanism, on an optional basis, for the secondary market on the lines of Application Supported by Blocked Amount (ASBA) for primary markets where investors' funds will continue to remain in their savings account with the required funds being blocked instead of the investor having to upfront transfer the amount to the broker's account for placing trades.

On December 29, the NPCI had said the 'UPI for secondary market' facility will go live from January 1 in the Beta phase for the equity cash segment, with support from clearing corporations, stock exchanges, depositories, stockbrokers, banks, and UPI app providers.

Initially, the facility will be available for limited set of pilot customers, NPCI had said in a statement on Friday.

During this pilot stage, investors can block funds in their bank accounts, which will only be debited by the clearing corporations after trade confirmation during the settlement period.

Clearing corporations will directly process payouts to these clients on a T+1 basis, the statement added.

This Beta launch is facilitated by brokerage Groww, alongside BHIM, and Yes Pay Next as the UPI apps.

Initially, HDFC Bank, and ICICI Bank customers will be able to avail of this facility and HDFC Bank, HSBC, ICICI Bank, and YES Bank are acting as sponsor banks for the clearing corporation and exchanges.

Other stakeholders, include stockbrokers such as Zerodha, Axis Bank, and YES Bank, and UPI-enabled apps like Paytm and PhonePe are in the certification stage and are set to participate in the Beta launch soon.