SEBI to Launch ‘SEBI Check’ to Verify UPI IDs and Curb Investment Frauds

In a major move to enhance investor protection and curb online financial frauds, the Securities and Exchange Board of India (SEBI) announced a new initiative titled “SEBI Check.” This tool will allow investors to verify UPI payment handles used by SEBI-registered intermediaries before making transactions. The new functionality, expected to be launched soon, will significantly increase the safety and transparency of financial operations in the securities market. Additionally, SEBI has mandated a new UPI payment mechanism for all intermediaries collecting funds from investors, effective from October 1, 2025.

Why in News?

On June 11, 2025, SEBI announced the upcoming launch of “SEBI Check” to verify UPI IDs. This initiative follows the increasing misuse of unverified UPI handles by fraudulent, unregistered entities impersonating legitimate financial intermediaries. The new UPI-based payment system will become mandatory for SEBI-registered entities from October 1, 2025.

What is “SEBI Check”?

• A digital verification tool for investors.

Allows users to,

• Scan a QR code or
• Enter the UPI ID manually.
• Confirms linked bank account details, including:
• Account number
• IFSC code
• Ensures the UPI ID belongs to a SEBI-registered intermediary.

Objective and Aim

• To combat impersonation fraud and phishing attacks.
• Empower investors with tools to verify recipients before transferring funds.
• Promote safe and regulated payment channels within capital markets.

Background

• In January 2025, SEBI floated a consultation paper proposing this mechanism.
• Rising cases of unauthorized fund collection by unregistered entities prompted SEBI to act.
• Fraudulent UPI handles were being used to mislead retail investors.

Key Features of the New UPI Mechanism

• Applicable to all SEBI-registered intermediaries (e.g., brokers, mutual fund distributors).
• Mandatory use of verified UPI handles.
• Boosts trust and transaction security in the Indian securities market.
• Enhances digital payment reliability for retail investors.