In the Statement on Developmental and Regulatory Policies on December 8, 2021, the Reserve Bank of India announced an increase in the UPI Transaction Limit for Specified Categories.
The statement said that the ‘Reserve Bank has been making efforts to facilitate greater participation of retail customers in financial markets, e.g. investment in the G-secs segment through the recent launch of Retail Direct Scheme, where UPI, in addition to other options such as internet banking, can be used to make payments for participating in both the primary and secondary markets.
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. Given 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.
According to the RBI statement, UPI is the single largest retail payment system in the country in terms of volume of transactions (14 crore transactions per day, October 2021), and 50 percent of transactions through UPI were below ₹200, indicating its success. India has a large mobile phone consumer base of about 118 crore mobile users (TRAI, October 2021)1 of which about 74 crores (Statista, July 2021) have smartphones indicating that there is a significant number of feature phone users in the country.
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