Unified Payments Interface (UPI) is a robust payments platform supporting an array of features. Presently it handles 75% of the retail digital payments volume in India. According to the RBI statement, UPI is the single largest retail payment system in the country in terms of volume of transactions. In terms of volume, the number of UPI transactions exceeded 804 crore in January 2023, while NEFT (National Electronic Funds Transfer) witnessed the highest-ever daily volume of 3.18 crore transactions on February 28. It is reported that the overall monthly digital payment transactions crossed over ₹1,000-crore-mark each month during the past three months.
The UPI system has been leveraged to develop products and features aligned with India’s payments digitisation goals. Recently, RuPay credit cards were permitted to be linked to UPI. At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets. It further said that over time, UPI has also become a popular payment option for Initial Public Offerings (IPOs) since its availability from January 01, 2019, however, it is reported that IPO applications of ₹2 to ₹5 lakh constitute approximately 10 percent of subscription applications. In view of the greater demand for UPI usage, the transaction limit in the UPI system was enhanced from ₹1 lakh to ₹2 lakh in March 2020. To further encourage the use of UPI by retail investors, it is proposed to enhance the transaction limit for payments through UPI for Retail Direct Scheme and IPO applications from ₹2 lakh to ₹5 lakh to further encourage the use of UPI by retail customers.RBI said that separate instructions to NPCI will be shortly issued in this regard.
It is now proposed to expand the scope of UPI by enabling transfer to/from pre-sanctioned credit lines at banks, in addition to deposit accounts. In other words, the UPI network will facilitate payments financed by credit from banks. This can reduce the cost of such offerings and help in the development of unique products for Indian markets.
In today’s Statement on developmental and regulatory policies, RBI said that detailed instructions in this regard will be issued separately.
