Increasing the limit for tax payments through UPI from INR 1 Lakh to INR 5 Lakh per transaction will ease payments made by consumers through the UPI, said RBI governor
The central bank also announced the introduction of delegated payments through the UPI
Delegated payment will let a primary user allow a secondary user to make UPI transactions up to a limit set by the primary user from the linked bank account
The Reserve Bank of India (RBI) on Thursday (August 8) announced increasing the Unified Payments Interface (UPI) transaction limit to INR 5 Lakh per transaction from the current INR 1 Lakh for tax payment purposes.
“Currently, the transaction limit for UPI is INR 1 Lakh, except for certain categories of payments which have higher transaction limits. It has now been decided to enhance the limit for tax payments through UPI from INR 1 Lakh to INR 5 Lakh per transaction. This will further ease payments by consumers through the UPI,” said RBI governor Shaktikanta Das during the bimonthly monetary policy committee meeting.
The central bank also announced the introduction of delegated payments through UPI.
“It is proposed to introduce a facility of delegated payments in the UPI. This should enable an individual (who) is a primary user to allow another individual, namely a secondary user, to make UPI transactions up to a limit set by the primary user from the primary user’s bank account, without the need for the secondary user to have a separate bank account linked to UPI,” said Das.
The RBI expects this to further deepen the reach and usage of digital payments, in particular the UPI, which has witnessed significant growth over the last few years.
In July, UPI witnessed a 49% jump year-on-year (YoY) to 14.44 Bn transactions in the month. In June, the number stood at INR 13.89 Bn.
Earlier this year, the RBI governor noted that India now represents nearly 46% of the world’s digital transactions as he attributed this growth to the widespread adoption of UPI.
UPI has also spread its wings internationally via partnerships in countries, including the UAE, France and Sri Lanka. As part of its newest efforts to increase the usage of UPI, the National Payments Corporation of India (NPCI) has also rolled out ‘UPI One World’ wallet for all foreign tourists.
As per a report, the NPCI is in discussions with several startups to enable biometric authentication for the popular mobile-based UPI payments, which would likely mean the usage of fingerprint on Android platforms and face ID verification for iPhones.
Besides its two announcements for UPI transactions, the RBI governor today also said that the central bank is setting up a public repository of digital lending apps to address issues arising from unauthorised platforms.
Meanwhile, the RBI during the MPC meeting today kept the repo rate unchanged at 6.5%. The country’s headline inflation increased to 5.1% in June 2024 after remaining steady at 4.8% during April and May 2024.
