In a significant move to facilitate seamless digital transactions in the domains of healthcare and education, the Reserve Bank of India (RBI) has announced an upward revision in the limit for UPI transactions. The limit has been elevated from Rs 1 lakh to Rs 5 lakh per transaction, allowing consumers greater flexibility in making online payments for educational and healthcare purposes.
The decision to raise the UPI transaction limit was revealed by the RBI following a comprehensive three-day monetary policy committee meeting. The central bank underscored that this adjustment aims to empower consumers by enabling transactions of higher amounts specifically earmarked for education and healthcare as reported by The Print.
The Unified Payments Interface (UPI), India’s mobile-based rapid payment system, has gained widespread popularity for facilitating round-the-clock payments through a Virtual Payment Address (VPA). The recent surge in adoption reflects its pivotal role in the landscape of retail digital payments in the country.
India has emerged as a flourishing hub for fintech innovation, with active contributions from both the government and the central bank in driving the global expansion of the country’s digital payment infrastructure. The emphasis has not only been on domestic benefits but also on fostering international collaborations. Countries such as Sri Lanka, France, the UAE, and Singapore have already partnered with India in exploring emerging fintech and payment solutions.
In a parallel development, the RBI has proposed an enhancement in the limit under e-mandates for recurring payments, allowing transactions of up to Rs 1 lakh per transaction. This move is expected to particularly benefit individuals engaged in recurring payments such as mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.
RBI Governor Shaktikanta Das, in his monetary policy statement, highlighted the growing popularity of e-mandates for payments of recurring nature. He noted that under the existing framework, an additional factor of authentication (AFA) is required for recurring transactions exceeding Rs 15,000. The proposed measure is anticipated to further streamline the usage of e-mandates in the financial landscape.
The RBI’s decision to raise the UPI transaction limit for hospitals and educational institutions to Rs 5 lakh per transaction is poised to have a substantial impact on the ease of digital payments in crucial sectors. This move aligns with India’s broader vision of globalizing its digital payment infrastructure, ensuring that the benefits of UPI extend not only to its citizens but also to international collaborators. The simultaneous proposal to enhance the limit under e-mandates reflects a forward-looking approach, promoting the seamless execution of recurring payments in the financial ecosystem.
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