SEBI Rolls Out Verified UPI Payment System to Protect Investors from Fraudulent Transactions

The Securities and Exchange Board of India (SEBI) has announced the implementation of a standardised, validated, and exclusive UPI ID system for all SEBI-registered investor-facing intermediaries.

Effective from October 1, 2025, this initiative is designed to ensure that investors transfer funds only to verified entities through identifiable and secure payment channels.

The circular, issued on June 11, 2025, mandates intermediaries such as brokers, mutual funds, portfolio managers, and other entities to generate unique UPI IDs that end with the handle “@valid” (e.g., abc.brk@validhdfc). These UPI handles, developed in coordination with the National Payments Corporation of India (NPCI), will be linked to intermediaries' verified bank accounts and will feature a recognisable visual marker—a white thumbs-up inside a green triangle—to indicate authenticity.

While usage of these validated UPI handles is optional for investors, it is compulsory for intermediaries to obtain and display them. SEBI has clarified that intermediaries must offer the new handles as a payment option and actively promote their use through investor awareness campaigns. Existing payment systems like IMPS, NEFT, RTGS, and cheque-based payments will continue, and ongoing systematic investment plans (SIPs) via old UPI handles will not be disrupted. However, all new SIPs and renewals must be made using the new UPI IDs.

To further bolster investor protection, SEBI will soon launch a verification tool called “SEBI Check.” This utility will allow investors to confirm the legitimacy of a UPI ID or scan a QR code before making a payment. The tool will also display related banking details such as the intermediary’s account number and IFSC code, providing an added layer of assurance.

The rollout involves 52 self-certified syndicate banks, including major names such as State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank, among others. These banks will be responsible for issuing the “@valid” handles to registered intermediaries and ensuring that due diligence procedures are followed.

SEBI has laid out a detailed activity-wise timeline for implementation. From the issuance of the circular on June 11, 2025, banks and intermediaries have up to 180 days to transition to the new system. Allocation of UPI IDs must be completed by mid-September, while investor education campaigns will commence from October onwards. Old UPI handles used by intermediaries must be discontinued by December 28, 2025.

The regulator has also provided a user-friendly utility on its SI Portal to generate usernames, apply for UPI IDs, and create QR codes. Each intermediary must generate a unique username suffixed with an abbreviation that reflects its category—for instance, “.brk” for brokers or “.mf” for mutual funds.

SEBI’s move is expected to significantly reduce the risk of payment frauds and bring greater transparency and trust in digital transactions within the securities market. It marks a crucial step in aligning the capital markets infrastructure with India’s fast-evolving digital payment ecosystem.

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