RBI on Thursday (August 8, 2024) in its Statement on Developmental and Regulatory Policies announced two major changes in the UPI payment system.
It is proposed to introduce a facility for “Delegated Payments” in UPI. This would enable an individual (primary user) to allow another individual (secondary user) to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI. This will further deepen the reach and usage of digital payments.
Moreover, it has been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. “As direct and indirect tax payments are common, regular, and high value, it has been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. Necessary instructions will be issued separately” said RBI.
RBI in its Statement on Development and Regulatory policies announcement in last December enhanced the limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction. This will help the consumers to make UPI payments of higher amounts for education and healthcare.
The transaction limit for UPI has been capped at ₹1 lakh, for most of the payments except for a few categories. The transaction limits for UPI payments for Capital Markets (AMC, Broking, Mutual Funds, etc.), Collections (Credit card payments, Loan re-payments, EMI), Insurance, etc. are restricted to ₹2 lakh. In December 2021, the transaction limit for UPI payments for Retail Direct Scheme and IPO subscriptions was increased to ₹5 lakh.
The Unified Payments Interface or UPI an instant payment system developed in India, by the National Payments Corporation of India (NPCI) continues to grow in popularity. The UPI transactions reached 9.3 billion in June 2023, up from 151 million in January 2018, primarily driven by the growth in Person-to-Merchant (P2M) transactions, the report on ‘India Digital Payments Report for H1 2023’ said. The report said out of the total 51.91 billion UPI transactions conducted between January and June of 2023, 29.15 billion were P2M payments, accounting for approximately 56.1% of the total.
