RBI MPC: Hike in UPI payment limit to Rs 5 lakh to benefit hospitals and patients alike, say experts

The Reserve Bank of India’s decision to increase Unified Payments Interface (UPI) payment limits for hospitals is anticipated to yield substantial operational advantages for both healthcare institutions and patients, according to industry experts.  

During the bi-monthly Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) announced an increase in UPI payment limits for hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.  

“The RBI’s decision is a positive development that will streamline payment processes and also ensure transparency. This significant enhancement is a progressive step towards facilitating larger transactions, particularly in the healthcare sector. This decision aligns with the government’s growing thrust on digitisation and ease of financial operations in our country,” said Vivek Kumar Goyal, Chief Financial Officer, Fortis Healthcare Limited.  

A research article published in The Lancet in October 2023, titled “Catalysing healthcare accessibility through cashless payment gateways in India: a digital revolution”, highlighted the transformative potential of integrating cashless payment gateways in India’s healthcare system. The study emphasised the positive impact on transparency, equitable access, and heightened patient experiences. Per the research, there has been a substantial increase in digital payment transactions within India, soaring from Rs 3,134 crore (FY19) to Rs 7,422 crore (FY22).  

“The decision will be of significant operational benefits to both hospitals and patients or their families. Earlier, there were restrictions on payment limits, or the payee had to use time-consuming payment methods,” said Dr. J. S Bhawalkar, Dean, Dr. D. Y Patil Medical College, Hospital and Research Centre, Pune.  

“This change in the e-transaction mandates will enable patients or caretakers to make swift transfers without any hassle in times of emergency. On the other hand, it will also boost transparency and fair play in the healthcare ecosystem,” Bhawalkar said.  

The Lancet research also highlighted how cashless payment gateways empower carers to prioritise family needs, stay closely involved in patient care, and remotely settle bills without visiting hospitals. Drawing insights from global experiences, the study emphasised that 65% of health consumers prefer providers offering advanced digital payment options.  

“The increased limit allows people to now easily make larger transactions using UPI for medical purposes, as these expenses usually tend to be high and very time-bound. By increasing the transaction limit, RBI is not only making it easier for people to access essential services conveniently but also helping to strengthen and make a more inclusive payment ecosystem,” said Kumar Abhishek, founder and CEO of ToneTag, a technology company specialising in sound-based contactless payments.  

The Union Health Ministry has also been actively promoting digital payment integration. The study also noted that the Covid-19 pandemic has underscored the significance of digital payments, aligning with the 'new normal' of social distancing and advocating contactless payment methods.  

“By starting with this elevated UPI payment limit, both patients and hospitals stand to benefit significantly, as it addresses existing challenges in a new era of seamless and efficient transactions. As per expectation, the UPI payment domain will boost solving the frequent issues faced,” said Jyoti Prakash Mahapatra, CFO, Ruby Hall Clinic.