With the growing use of UPI transactions in India, SEBI has also allowed in public offers to make payment for the bid, blocking and release the amount during the offer process. In this context, briefly explain the use of

Public issue application using UPI is a step towards digitizing the offline processes involved in the application process by moving the same online. This requires to create a UPI ID and Pin using any of the UPI enabled mobile application. The UPI ID can be used for blocking of funds and making payment in the public issue process. One can accept the request to block the funds for the amount they have bid by entering their UPI Pin in the mobile application. The money shall be blocked and shall be automatically remitted to the Escrow Bank, in case of allotment. UPI in public issue process shall essentially bring in comfort, ease of use and reduce the listing time for public issues. UPI as part of Bidding: Investor will fill in the bid details in the application form as per the existing process along with his UPI ID. As per the existing process, investors may submit the application with any of the intermediary (Syndicate Member/Registered Stock Brokers/Registrar and Transfer Agents/Depository Participants), who, on receipt of application will upload the bid details along with investors UPI ID in the stock exchange bidding platform. The stock exchange will electronically share the bid details, along with investors UPI ID, with the Escrow/Sponsor Bank appointed by the issuer company. UPI as part of Blocking: The Escrow/Sponsor Bank will intimate a mandate request on the investor, i.e., request the investor to authorize blocking of funds equivalent to applicant amount and subsequent debit of funds in case of allotment. The request raised by the Escrow/Sponsor Bank, would be electronically received by the investor as SMS/Intimation on his/her mobile number linked to UPI ID. Upon validation of block request by the investor, the said information would be electronically received by the investor's bank, where the funds, equivalent to application amount, would get blocked in investors account. Intimation regarding confirmation of such block of funds in investors account would also be received by the investor. UPI as part of payment for shares post allocation process: The Registrar to the issue, based on information of bidding and blocking received from stock exchange, would undertake reconciliation and prepare the basis of allotment. Upon approval of such basis, the instructions would be sent to sponsor bank to initiate process for credit of funds in the public issue ESCROW account and unblocking excess money. Based on authorization given by investor using UPI Pin at the time of blocking, the funds, equivalent to the allotment, would be debited from investors account and remaining funds, if any, would be unblocked.