InvestorQ : Can retail investors buy new bonds through UPI?
Pratik vyas made post

Can retail investors buy new bonds through UPI?

Suresh Patil answered.
3 months ago
Yes, the Securities and Exchange Board of India (Sebi) has recently enabled UPI payments for the online purchase of debt securities issued to the public. Currently, to buy debt securities, investors have to go through a paper-based process through their banks.

The process that was followed to buy these securities is through ASBA (Applications Supported by Blocked Amount), where an amount would get blocked in the investor’s bank account and only get debited once the shares get allotted. Sebi has now also enabled UPI based transactions for the purchase of these securities. The regulator has permitted the buying of these securities up to the application value of Rs 2 lakh.

Similarly, it has allowed securities to be purchased through intermediaries like stockbrokers. The exchange itself is working on building a web and app-based platform to encourage online buying and selling of these securities digitally. The one thing that investors need to be careful of is, need to place their bids through the right UPI ID — connected with the same bank account that has been listed with the exchanges; a different ID will cause the process to drop off.

According to details laid out by Sebi, once the bid is submitted, the fund block will need to be permitted by the investor through his or her UPI pin. Once allotment happens, the amount will be debited from the bank account directly.