The Reserve Bank of India on Friday raised UPI payment limits for hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh per transaction. RBI Governor Shaktikanta Das announced it during the bi-monthly Monetary Policy Committee (MPC) meeting. "This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes," Das said.
The RBI has also proposed to enhance the limits of e-mandates for recurring online transactions to Rs 1 lakh per transaction from Rs 15,000 per transaction for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments. "This will further accelerate the usage of e-mandates," Das said.
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The Unified Payments Interface (UPI) is a real-time payment system in India that allows seamless, instant transactions between different banks using smartphones. Launched by the National Payments Corporation of India (NPCI), UPI transformed digital transactions by providing a unified platform for various banking services.
It operates by linking bank accounts to a mobile number, enabling users to make payments, transfer funds, and perform other financial activities through UPI-enabled apps. Users create a unique UPI ID, which acts as an identifier for transactions, eliminating the need for sharing sensitive bank details.
UPI offers unparalleled convenience, allowing transactions 24/7, including peer-to-peer payments, bill splitting, and online shopping. Its interoperability between banks simplifies money transfers, leading to widespread adoption across businesses and individuals. Additionally, UPI facilitates government initiatives, such as direct benefit transfers and promoting a cashless economy.
Adhil Shetty, CEO of BankBazaar.com, said on RBI's announcements, "RBI’s proposal from earlier today to elevate UPI payment limit from Rs.1 lakh to Rs.5 lakh for education and hospital payments is a critical step that will facilitate a secure and seamless payment experience for countless users who rely on UPI for payment-related needs. Education expenses usually tend to be high and very time-bound. Increasing the UPI limit for education up to Rs.5L means students and parents will be able to make immediate hassle-free cash payments without needing to resort to instruments such demand drafts."
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