RBI for increasing the UPI transaction limit to Rs 5 lakh in some cases
By Piyush Shukla
The Reserve Bank of India (RBI) has proposed to increase the transaction limit for payments made through the Unified Payment Interface (UPI) for Retail Direct Schema and Initial Public Offer Requests (IPOs) ) at Rs 5 lakh from Rs 2 lakh. The central bank will shortly be giving separate instructions to the National Payment Corporation of India (NPCI) in this regard.
In a statement on development and regulatory policies released after the monetary policy committee meeting, the central bank said that over time, the UPI has become a popular payment option for IPOs and that IPO requests of Rs 2 lakh to Rs 5 lakh constitute around 10% of all subscription requests. The transaction limit in the UPI system was increased from Rs 1 lakh to Rs 2 lakh in March 2020 and to further encourage the use of the UPI by retail investors, the central bank has proposed to increase the limit by UPI transaction.
The RBI Retail Direct Scheme was launched on November 12 to allow retail investors to open a retail gilt direct account to invest in primary issue transactions and the secondary market in government securities (G-Secs).
The central bank said UPI is the country’s largest retail payment system, with 14 crore in transactions per day according to October data, and that one of UPI’s initial goals was to replace cash. for low value transactions. Analysis of transaction data shows that 50% of transactions through UPI were below Rs 200, indicating its success.
“These low-value transactions, however, use significant capacity and system resources, sometimes causing inconvenience to customers due to transaction failures due to connectivity issues. It is therefore proposed to offer a simpler process flow by enabling low value transactions through an ‘on the device’ wallet in the UPI application, which will conserve the system resources of banks without any change in the experience of transaction for the user, ”the RBI mentioned.