Zerodha co-founder Nithin Kamath has advocated the latest UPI security feature introduced by the Securities and Exchange Board of India (Sebi) amid the rising number of investment scams related to fraudulent brokers.
In a post on the social media platform X, Kamath wrote, “The number of fraud cases involving scammers impersonating brokers and asking for money to be transferred to random accounts has skyrocketed. To protect investors, SEBI has introduced a new UPI security feature. All legitimate fund transfers will now only go to verified UPI handles.”
What is Sebi’s validated UPI security feature?
The market regulator is set to introduce a new UPI address structure for all Sebi-registered entities that collect funds from investors. The latest feature, which will be effective from October 1, 2025 aims to tackle growing concerns of payment fraud among investors, especially in online investment platforms, Sebi said in a notification of June 11, 2025.
How will validated UPI work?
The latest framework includes a mandatory and structured UPI address for all intermediaries, which consists of a username and a unique handle.
Username
The username is a readable name chosen by the entity, including a mandatory suffix that will help to identify the category of the intermediary. For example, brk for a stock broker or mf for a mutual fund.
Unique handle
The handle will consist of an exclusive identifier such as “@valid”, along with the bank. These “validated” handles will be allocated by the National Payments Corporation of India (NPCI) only for payment purposes for entities registered by Sebi.
Visual Verification
To facilitate the recognition of valid transactions, investors will notice a distinct symbol, which will be a “Thumbs-Up inside a green triangle” icon, when they make a payment to a registered intermediary through this new handle.
Mandatory QR Code
Intermediaries must also create a QR code that clearly displays this “thumbs-up” logo for the convenience of investors.
Sebi’s check tool
In addition to the UPI validity feature, the market will also introduce Sebi Check, a tool for investors to verify the authenticity of UPI IDs.
Investors can verify UPI IDs either through scanning a QR code or by entering the UPI ID manually. Following this, they will be required to confirm the bank details such as the bank account number and the Indian Financial System Code (IFSC) of a registered intermediary.
