HDFC Bank Initiates UPI Transactions in Secondary Market Beta Launch

2 Jan 2024 , 01:52 AM

HDFC Bank has engaged in transactions through NPCI’s UPI payments app under the newly launched ‘UPI for secondary market’ facility, in accordance with Sebi’s approval for such transactions.

The facility, effective January 1, allows trading in the secondary market through a block mechanism in the cash segment. This approach is optional and resembles the ASBA model used in primary markets.

NPCI announced on December 29 that the ‘UPI for secondary market’ facility would commence its Beta phase on January 1, with participation from clearing corporations, stock exchanges, depositories, stockbrokers, banks, and UPI app providers.

During the pilot stage, a limited set of customers can block funds in their bank accounts, with actual debiting occurring only after trade confirmation during the settlement period.

Payouts to clients will be processed directly by clearing corporations on a T+1 basis, as HDFC Bank, BHIM, and Yes Pay Next act as UPI app providers for this Beta launch, facilitated by brokerage Groww.

Initially, HDFC Bank and ICICI Bank customers will have access to this facility, with HDFC Bank, HSBC, ICICI Bank, and YES Bank serving as sponsor banks for clearing corporations and exchanges.

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

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