UPI payment limit raised to Rs 5 lakh: Reserve Bank

MUMBAI: In a major decision, the RBI on Friday announced to raise the UPI payment limit to hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh presently and hiked the cap for e-mandates for recurring payments to Rs 1 lakh.

The Reserve Bank Governor said the limit for various categories of Unified Payments Interface (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,’’ he said. The enhanced limit will help consumers make UPI payments of higher amounts for education and healthcare purposes. He further said e-mandates for making payments of a recurring nature have become popular among customers.

Under the e-mandate framework, an additional factor of authentication (AFA) is required for recurring transactions exceeding Rs 15,000 currently. “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 governor said.

The measure, he said, will further accelerate the usage of e-mandates. In another development, the RBI also announced to set up a “Fintech Repository’’ for a better understanding of developments in the fintech ecosystem and support the sector.

“This will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. FinTechs would be encouraged to provide relevant information voluntarily to this Repository,’’ Das said.

Financial entities like banks and NBFCs in India are increasingly partnering with fintechs. The RBI is working on the establishment of a cloud facility for the financial sector in India. Banks and financial entities are maintaining an ever-increasing volume of data.