RBI approved higher UPI limits for person-to-merchant payments.
According to the governor, banks will still be free to set their own internal limits as long as they stay within the boundaries set by the NPCI. However, the Rs 1 lakh cap on P2P transactions on UPI will remain in place.
On Wednesday, the Reserve Bank permitted NPCI to increase the UPI transaction limits for P2M (person-to-merchant) payments in response to changing user requirements.
Except for certain P2M payment use cases, which have higher limits of Rs 2 lakh and Rs 5 lakh, the transaction amount for UPI, which covers both Person to Person (P2P) and Person to Merchant (P2M) payments, is currently capped at Rs 1 lakh.
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RBI Governor Sanjay Malhotra stated, "It is suggested that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs to enable the ecosystem to respond efficiently to new use cases." He added that the risks associated with higher limits will be mitigated by appropriate safeguards.
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