Informist, Friday, Jun 28, 2024

MUMBAI – As per the latest information with the Securities and Exchange Board of India, the payment glitch affecting transactions on a stock exchange's mutual fund platform on Jun 4 was due to an issue at the payment aggregator's end. SEBI Chairperson Madhabi Puri Buch said at a press conference on Thursday that payment aggregator Razorpay had an issue and that Jun 4 was the second time a problem was seen with it.

Buch said that in such cases, the option of inter-regulatory interaction is open to SEBI. "We can discuss (with Reserve Bank of India)… but, finally, we (SEBI and RBI) trust each other….so we cannot and should not interfere in what is their regulatory domain," Buch said.

On Jun 4, when India declared the result of its General Election and markets saw a steep fall with the Nifty 50 shedding as much as 8.5% intraday, many mutual fund investors who put in purchase orders before the cut-off time on the BSE's mutual fund platform did not get units at the net asset value of that day. Media reports indicated that the funds these investors paid towards the purchases using the United Payments Interface did not reach the exchange's clearing and settlement system in time. This resulted in payment delays to mutual fund houses which, hence, could not allot units at same-day NAV.

According to a BSE statement on Jun 7, there was no technical glitch at the exchange end, but "some lag in receiving payments from UPI channel for a few customers." This resulted in investors receiving units at next-day NAV, the exchange said. There were complaints from investors that they were alloted units at higher NAV since on Jun 5 the stock market had rebounded with the Nifty 50 rising 3.6% intraday.

In the press conference on Jun 7 following the monetary policy statement, RBI Governor Shaktikanta Das said that UPI-related payment problems typically occur at banks' end. Das said that the central bank checks at banks' end as well as at the end of the National Payments Corporation of India, which operates the UPI. At the same press conference, RBI Deputy Governor T. Rabi Sankar said that the central bank had been trying continuously to cut UPI downtime. End

Reported by Rajesh Gajra

Edited by Deepshikha Bhardwaj

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