Reserve Bank of India has raised the UPI payment limits to Rs 5 lakh from Rs 1 lakh earlier.
It will allow consumers to make higher UPI payments for education as well as medical purposes.
During the Monetary Policy Committee (MPC) announcement, RBI Governor said, “The limit for various categories of UPI transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.
This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes.
The announcement of the increased UPI payment limit is a welcome move, signalling a positive shift in the dynamics of financial transactions. This strategic decision holds the potential to bring about a transformative impact, especially in the context of healthcare.
By starting with this elevated UPI payment limit, both patients and hospitals stand to benefit significantly, as it addresses existing challenges in a new era of seamless and efficient transactions. As per expectation, the UPI payment domain will boost in solving the frequent issues faced.
What are the current UPI transaction limits?
For Initial Public Offering (IPO) and Retail Direct Scheme, the limit is up to Rs 5 lakh per transaction.
E-mandate for recurring payments raised to Rs 1 lakh
In another key announcement related to digital payments, RBI Governor proposed to hike the e-mandate for recurring payments to Rs 1 lakh from current Rs 15,000 for mutual funds, insurance premiums and credit card payments.
E-mandates for making payments of a recurring nature have become popular among customers.
Under this framework, an additional factor of authentication (AFA) is currently required for recurring transactions exceeding Rs 15,000. It is now proposed to enhance this limit to Rs 1 lakh per transaction for recurring payments of mutual fund subscriptions, insurance premium subscriptions and credit card repayments.
The number of e-mandates registered currently stands at 85 million, processing nearly Rs 2,800 crore of transactions per month.
The system has stabilised, but in categories such as subscription to mutual funds, payment of insurance premium and credit card bill payments, where the transaction sizes are more than Rs 15,000, a need to enhance the limit has been expressed as adoption has been lagging,” the RBI said in its statement on development and regulatory policies.
It is, therefore, proposed to exempt the requirement of AFA for transactions up to Rs 1 lakh for the following categories, viz., subscription to mutual funds, payment of insurance premium and payments of credit card bills. The other existing requirements such as pre and post-transaction notifications, opt-out facility for user, etc. shall continue to apply to these transactions. The revised circular will be issued shortly.