RBI to Raise UPI Limit and Introduce New Fintech Repository for Indiaby Fintech News Singapore December 11, 2023
The Reserve Bank of India (RBI) has announced a series of updates, including an increase in the transaction limit for the Unified Payments Interface (UPI), particularly for payments related to medical and educational services.
The limit has been proposed to be raised from one lakh (approximately US$1,200) to five lakh (approximately US$5,993) rupees per transaction, in response to the increasing UPI usage across various sectors.
“To encourage the use of UPI for medical and educational services, it is proposed to enhance the limit for payments to hospitals and educational institutions from Rs1 lakh to Rs 5 lakh per transaction. Separate instructions will be issued shortly,”
announced Reserve Bank of India Governor Shaktikanta Das, following a meeting of the Monetary Policy Committee.
In addition, the Governor informed that the RBI has revised its approach to electronic mandates. Transactions up to one lakh rupees in certain categories, such as mutual funds and credit card payments, will no longer require an additional factor of authentication, or AFA.
This decision comes as electronic mandates have grown to 8.5 crore (US$1.02 million) in volume, facilitating transactions amounting to nearly 2,800 crore rupees per month.
Addressing data security concerns, Governor Das said the RBI is also setting up a cloud facility for the financial sector. Initially to be managed by the Indian Financial Technology & Allied Services (IFTAS), a subsidiary of the RBI, this facility will eventually “be transferred to a separate entity owned by the financial sector participants”, according to the Governor, with the aims to ensure the security, integrity, and privacy of financial data.
To better understand and engage with the fintech ecosystem, the central bank Governor also revealed that a fintech repository will be established to gather crucial information about fintech companies, their activities, and financial details. This repository, set to be operational by April 2024 or earlier, is intended to guide the development of policies tailored to the evolving needs of the fintech sector.