RBI to Leave Decision on Person-to-Merchant Payment Cap for UPI Transactions to NPCI
New Delhi(The Uttam Hindu): To further promote digital payments, the National Payments Corporation of India (NPCI) will be given the authority to set limits on person-to-merchant (P2M) transactions conducted via the Unified Payments Interface (UPI), announced RBI Governor Sanjay Malhotra on Wednesday. Currently, the UPI transaction limit for both person-to-person (P2P) and P2M payments is capped at Rs 1 lakh, except for certain P2M transactions that have higher limits, with some set at Rs 2 lakh and others at Rs 5 lakh. Malhotra explained that to allow the UPI ecosystem to respond effectively to new use cases, NPCI, in consultation with banks and other stakeholders, will be empowered to announce and adjust transaction limits based on evolving user requirements.
He added that safeguards will be put in place to manage the risks associated with higher limits, and banks will continue to have the discretion to set their own internal limits within the broader limits announced by NPCI. The Rs 1 lakh cap for P2P transactions will remain unchanged. The decision regarding the limits will be made by NPCI in consultation with banks and other key players in the UPI ecosystem, as per the RBI's announcement during the monetary policy meeting. In the month of March, UPI transaction volume saw a notable 13.59% month-on-month increase, reaching 18.3 billion transactions, up from 16.11 billion in February. March also saw a record Rs 24.77 lakh crore in UPI-based transactions, marking a 12.79% increase compared to Rs 21.96 lakh crore in February.
On average, over 590 million transactions were recorded daily in March, with a daily transaction value of Rs 79,910 crore. On a year-on-year basis, March’s record-breaking UPI transactions saw a 25% surge in value and an impressive 36% growth in volume, highlighting the growing momentum of India’s digital payments revolution. These figures reflect the increasing adoption and trust in digital financial solutions, with both transaction value and volume continuing to rise steadily.
