HDFC Bank Expands Trading Horizons with UPI for Secondary Market

In a significant move, HDFC Bank has successfully conducted transactions using the National Payments Corporation of India’s (NPCI) UPI payments app under the newly launched ‘UPI for secondary market’ facility. The feature, which commenced operations on Monday, was greenlit by the Securities and Exchange Board of India (Sebi), marking a pivotal development in the financial market landscape.

Starting January 1, Sebi and stock exchanges have allowed trading in the cash segment through a block mechanism, akin to the Application Supported by Blocked Amount (ASBA) for primary markets. This allows investors to keep their funds in their savings accounts, with the necessary funds only being blocked when required, instead of upfront transfers to the broker’s account.

NPCI announced on December 29 that the ‘UPI for secondary market’ facility would enter its Beta phase on January 1 for the equity cash segment. Initially, a select group of pilot customers, including HDFC Bank and ICICI Bank patrons, will be able to utilize this service. During the pilot phase, investors can block funds in their accounts, which will be debited by clearing corporations post trade confirmation.

The Beta launch, supported by brokerage Groww, BHIM, and Yes Pay Next as UPI apps, is facilitated by sponsor banks including HDFC Bank, HSBC, ICICI Bank, and YES Bank. Stakeholders like Zerodha, Axis Bank, and YES Bank, along with UPI-enabled apps such as Paytm and PhonePe, are in the certification stage and expected to join the Beta launch soon. This development opens new avenues for investors, streamlining the trading process in the secondary market.