The Reserve Bank of India has decided to increase manifold Unified Payments Interface transaction limit with an aim to facilitate further digital payments in the country. With immediate effect, per transaction limit under the UPI has been enhanced from existing Rs 1 lakh to Rs 5 lakh.
Making Tax Payments Easy through UPI
The move could be a nudge by RBI to enable more valued transactions through the UPI platform and ease tax payments by consumers. Increasing this limit would allow people and businesses to undertake larger transactions—like remitting taxes—without any hiccup through the user-friendly interface of UPI.
Delegated Payments: Expanding UPI’s Reach
The RBI is mulling over another big-ticket proposal under which “delegated payments” would be introduced through the UPI system. The feature will enable a primary user to delegate another person to make UPI transactions up to a certain limit directly from the bank account of the former. This move would go a long way in onboarding and deepening the usage of digital payments further, as there would be no need for the second user to have a bank account that is separately linked to UPI.
Abatement of Unauthorized Digital Lending Applications
Taking cognizance of the increasing concerns on the issue of unauthorized digital lending applications, the RBI has also announced its intention for a public repository of the class of lending applications deployed by its regulated entities like banks and financial institutions. This will help consumers to make out the authorized and unauthorized applications and impart more transparency and protection to them.
Faster Credit Information Reporting
In another consumer-friendly move, the RBI has also recommended that the frequency of credit information reporting by institutions to CICs should be increased to a fortnightly basis or at even shorter intervals. This will ensure faster updation of borrowers’ credit information, particularly when they repay their loans, thus making it possible for lenders to take a more informed risk assessment.
Empowerment of Digital Payments Ecosystem
The steps taken by RBI are in the spirit of empowering the Digital Payments Ecosystem in India. The way that it is increasing the transaction limit of UPI, allowing delegated payments, and bringing transparency to the loan landscape, all suggest a more inclusive, efficient, and user-friendly approach toward digital financial landscapes.
These reforms, spearheaded by the RBI, would lead the nation in its continuing journey toward a less-cash, more financially inclusive economy while the digital payments revolution changes the way Indians transact.