New Delhi: The Reserve Bank of India (RBI) has announced a series of measures to enhance the convenience and security of digital payments through the Unified Payments Interface (UPI), a popular platform that enables instant and seamless transactions across banks and wallets.
The central bank has raised the limit for automated recurring payments through UPI from Rs 15,000 to Rs 1 lakh per transaction for certain categories, such as mutual fund subscriptions, insurance premiums, and credit card bill payments. This will allow customers to set up standing instructions for these payments and have them deducted automatically from their accounts, without the need for additional factor authentication (AFA), which is a security feature that requires the user to enter a PIN or an OTP to confirm the transaction.
The RBI has also increased the limit for one-time payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction for specific purposes, such as payments to hospitals and educational institutions. This will enable customers to make larger and faster payments through UPI, which has emerged as the preferred method of digital payment for a large section of the population. According to the National Payments Corporation of India (NPCI), which operates UPI, the platform recorded more than 11.23 billion transactions in November, with a total value of over Rs 16.29 lakh crore.
The RBI has issued a circular on December 13, stating that these changes will come into effect from January 1, 2024. The circular also said that the RBI will issue guidelines for the implementation of these measures in consultation with the stakeholders.
The RBI Governor, Shaktikanta Das, had hinted at these measures while announcing the bi-monthly monetary policy on December 8. He had said that the RBI was considering the proposal to increase the limit for automated recurring payments through UPI and that it had already increased the limit for one-time payments through UPI for some purposes.
The RBI’s move is expected to boost the adoption and usage of UPI, which is a key component of the government’s vision of making India a digital economy. UPI offers a simple, secure, and interoperable way of making and receiving payments through smartphones, using a virtual payment address (VPA) or a QR code. UPI also supports various features, such as peer-to-peer transfers, bill payments, merchant payments, and e-commerce payments.