The Securities and Exchange Board of India (SEBI) has rolled out two interlocking measures — Validated UPI Handles and SEBI Check — aimed at tightening the verification of fund transfers between investors and capital markets intermediaries.
Under the new system, intermediaries registered with SEBI who collect funds from investors must now adopt UPI addresses suffixed with “@valid”. In addition, category-specific extensions such as “.brk” for brokers or “.mf” for mutual funds will be required. Payments made via these handles will carry a visual cue — a “thumbs-up inside a green triangle” icon — signaling authenticity to end users.
Concurrently, the SEBI Check tool empowers investors to independently verify UPI IDs, bank account numbers, and IFSC codes of intermediaries. It is accessible via SEBI’s portal, its Saarthi app, or through the SEBI Check interface itself.
The Fraud Landscape That Prompted Reform
SEBI’s move comes amid rising incidents where fraudsters impersonate brokers or mutual funds to siphon money from unsuspecting investors. In its press release, the regulator cited growing demands from market users for clearer verification tools and protection against payment fraud.
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In recent months, multiple news reports documented investors being lured to transfer funds to false UPI accounts masquerading as legitimate intermediaries. Market participants welcomed the change — Zerodha’s CEO publicly endorsed the move, calling it a step toward reducing scams involving fake UPI IDs.
Still, the scale of the challenge is significant. While large brokers and mutual funds — covering over 90 percent of the investor base — have already adopted the @valid scheme ahead of the deadline, many smaller intermediaries and regional entities may lag behind.
Practical Hurdles and Stakes for Investors
In theory, a UPI handle ending with “@valid” plus the correct visual icon should be enough to assure investors of legitimacy. But in practice, the regulatory push must contend with user behavior, app integrations, and legacy processes.
Investors may not always scrutinize handles or icons closely — especially in smaller-value or routine transactions. Recognizing potential confusion, SEBI has allowed existing modes (NEFT, RTGS, IMPS) to remain viable alongside the new system.
More complex is the question of enforcement and monitoring. If a fraudulent intermediary manages to falsely secure a “@valid” handle or replicate the icon, the safeguards could be undermined. Moreover, SEBI must ensure that the verification tool itself remains transparent, accurate, and kept up to date.
For many intermediaries, the shift will also require back-end upgrades. Issuing new handles, updating QR codes, and ensuring real-time feed of verification status across UPI apps and investor platforms involves coordination across banks, UPI networks, and trading systems.
Toward Trust, But Not Overnight
For SEBI, the validated UPI initiative and SEBI Check mark more than cosmetic change: they signal an effort to institutionalize trust in India’s digital investment ecosystem. In its press release, the regulator framed the rollout as a response to “the issue of impersonation, enhancing investor confidence, and preventing unauthorized fund collection.”
Yet even as the mechanisms fall into place, their effectiveness will hinge on adoption, vigilance, and enforcement. The visual cues and verification tools must translate into widespread investor practice. More importantly, SEBI must monitor the new system for misuse, gaps, or lapses — and respond swiftly.
In the months ahead, observers will look not just at how many brokers adopt the handles, but how often they prevent fraud — whether investors feel safer, and how the system handles real-world attacks or workarounds. For now, SEBI’s validated UPI endeavor is a bold step into the intersection of regulation, payments, and trust.
