Public Debt Issuance: SEBI raises investment limit to ₹5 lakh via UPI mechanism

The new framework will apply to public debt issuances opening on or after May 1, 2022

The new framework will apply to public debt issuances opening on or after May 1, 2022

SEBI on Tuesday increased the investment limit on payments through the UPI mechanism for retail investors buying debt in public issues to 5 lakh from the current 2 lakh to make it easier for investors to invest.

The new framework applies to public debt issuances opening on or after May 1, 2022, the Securities and Exchange Board of India (SEBI) announced in a circular.

Current SEBI rules offer investors the ability to apply for public debt issuance with the ability to freeze funds through the UPI (Unified Payment Interface) mechanism for an application value of up to ₹2 lakh.

Based on discussions with market participants and in order to harmonize the requirements and make it easier for investors to invest, SEBI has now decided to increase the limit for investments via the UPI mechanism to ₹5 lakh.

The investor can use the mechanism to freeze the funds for an application value up to ₹5 lakh per application.

UPI is an instant payment system developed by the National Payments Corporation of India (NPCI). It allows instant transfer of money between any two people’s bank accounts with one payment.

In December 2021, NPCI had increased the per-transaction limit in UPI from 2 lakh to 5 lakh for the UPI-based application backed by the Blocked Amount (ASBA) Initial Public Offer (IPO).

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