In a substantial move, the Reserve Bank of India (RBI) declared a major revision in the UPI (Unified Payments Interface) payment limits, increasing the cap for transactions to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh. The announcement was made by RBI Governor Shaktikanta Das during the unveiling of the December bi-monthly monetary policy.
Governor Das highlighted that the decision to enhance the UPI transaction limit for payments to hospitals and educational institutions is aimed at facilitating consumers in making higher UPI payments, particularly for education and healthcare purposes. The adjustment in the limit is part of the RBI’s ongoing efforts to review and adapt various categories of UPI transactions to meet evolving needs.
In addition to the UPI limit adjustments, the RBI has raised the cap for e-mandates for recurring payments from Rs 15,000 to Rs 1 lakh. Governor Das emphasized the popularity of e-mandates for making payments of a recurring nature and noted that this measure will further expedite the adoption of e-mandates. The enhanced limit is applicable to recurring payments for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.
Moreover, in a bid to better understand developments in the fintech ecosystem and support the sector, the RBI announced the establishment of a “Fintech Repository.” Operationalized by the Reserve Bank Innovation Hub, the repository is set to be in action by April 2024 or earlier. Fintechs are encouraged to voluntarily provide relevant information to this repository, fostering a comprehensive understanding of the fintech landscape.
Governor Das also shared that the RBI is actively working on the establishment of a cloud facility for the financial sector in India. With financial entities increasingly relying on cloud facilities for data storage, the central bank’s cloud facility aims to enhance data security, integrity, and privacy. This facility, expected to be rolled out in a calibrated manner over the medium term, will also contribute to better scalability and business continuity in the financial sector.
These strategic decisions by the RBI reflect a proactive approach to adapt to the changing dynamics of digital transactions, recurring payments, and the evolving fintech ecosystem, with a focus on improving user experience, security, and the overall efficiency of financial operations.
