How to use Bhim UPI to apply for IPO

UPI (United Payments Interface) is a payment system of NPCI which allows people to instantly transfer money between two parties’ bank accounts using IMPS infrastructure.

SEBI has permitted the use of UPI id for application to public issues. One’s UPI id can be used as a payment option for making application to such issues. This process has considerably reduced the IPO application time.

• Creation of UPI ID

UPI ID (also known as the Virtual Payment Address or VPA) is a unique ID that a subscriber needs to create by adding his bank account details in order to send and accept money via UPI. To be able to create UPI ID, one needs to download the BHIM application or any other UPI enabled mobile application of the bank where the subscriber has an account.

• Application form

At the time of filling up the IPO/FPO application form, the UPI ID must be mentioned. After filling in other details, the subscriber can submit the form to the broker or the financial adviser.

• Block mandate

The broker will forward the application by updating the system with application details and UPI id. A request for blocking funds shall be sent to the subscriber on the UPI mobile application. The subscriber needs to enter the UPI PIN to approve the block mandate. Funds to the extent of amount applied for, will get blocked in the subscriber’s bank account.

• Allotment/non-allotment

Once the allotment of securities is made, if the subscriber receives full allotment, the entire blocked amount will be debited from the bank account. If partial allotment has been made, only partial amount will be debited and remaining funds will be unblocked. If there is no allotment, all the blocked funds will be unblocked.

Points to note

• Existing UPI ID can be used for application provided it is held with a bank whose name is appearing in the "List of SCSBs eligible to act as issuer bank" on SEBI website.
• Only one application is allowed per UPI ID.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)