What is third-party UPI application?

In simple words if anyone applies in an IPO using their bank account but the Demat account is of another person (family/friends/relative) then the process is called 3rd party IPO application.

To subscribe to an IPO via UPI, UPI ID and Demat account must belong to the same person; third-party payment is not acceptable. Thus, it is only allowed when you are applying to an IPO via ASBA net banking process.

There are some banks such as SBI, Axis, and RBL that allow third-party IPO application via ASBA facility. Suppose, if a person invests in an IPO using his/her own bank account but the Demat account belongs to a different person, say B, it's called Third party ASBA application. However, leading Indian banks like ICICI, HDFC, etc. does not allow third-party payment for IPO application.

Note: Banks no more accept 3^rd-party ASBA IPO application through ASBA with effect from 1^st May 2022.

As per new guidelines also 3^rd party ASBA is not allowed, but still, we have seen some examples where investors are getting allotment in 3^rd part applications.

To apply in IPO for Minors account, you can open demat account with any broker-preferred Prostocks who are specializes in Minor and NRO account. Also you can open joint bank account of your minor with HDFC. With that you can apply in any IPO, FPO with your minors account also.