The Reserve Bank of India (RBI) has introduced a pivotal change in the digital payment landscape by raising the limit for automatic payments through Unified Payments Interface (UPI) to Rs 1 lakh per transaction. This substantial increase, up from the previous cap of Rs 15,000, is specifically applicable to certain categories, including mutual fund subscriptions.

Under the existing framework, the RBI permits a relaxation in Additional Factor of Authentication (AFA) for the processing of e-mandates and standing instructions on cards, prepaid payment instruments, and UPI. This relaxation is targeted at subsequent recurring transactions, with the initial value limit set at Rs 15,000.

In a circular addressing the “processing of e-mandates for recurring transactions,” the central bank articulated, “…it has been decided to increase the limit from Rs 15,000 to Rs 1,00,000 per transaction for… subscription to mutual funds, payment of insurance premiums, and credit card bill payments.”

Reserve Bank Governor Shaktikanta Das announced this development during the unveiling of the December bi-monthly monetary policy last week. The primary objective of this adjustment is to streamline and facilitate various financial transactions, with a notable impact on activities such as mutual fund investments, insurance premium payments, and credit card bill settlements as reported by The Print.

The increase in the UPI transaction limit aligns with the platform’s growing popularity, as it emerges as the preferred mode of payment for a substantial segment of the population. November witnessed an impressive 11.23 billion transactions through UPI, underscoring its widespread acceptance and usage.

Anticipated to simplify and expedite transactions, the decision to raise the UPI transaction limit provides users with added flexibility in managing their financial commitments. This move resonates with ongoing efforts to promote digital transactions and create a more user-friendly financial ecosystem.

As the RBI adapts to the evolving digital landscape, the enhanced UPI transaction limit is poised to bring about a positive shift in the way individuals conduct financial transactions. This development is expected to foster a more seamless and efficient experience for users across the country.

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