UPI Transaction Limit Raised For Health, Educational Units; New Rules On E-Mandates for Recurring Payments – News18

The Reserve Bank of India (RBI) on Friday decided to raise the UPI limit for payments to healthcare units like hospitals and educational facilities like colleges and schools to Rs 5 lakh per transaction, from the current Rs 1 lakh. RBI Governor Shaktikanta Das on Friday also announced new limits for e-mandates for recurring payments.

“This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes,” Das said.

As part of the decision on e-mandates, the RBI has proposed to increase the limit for additional factor authentication (AFA) to Rs 1 lakh, for mutual fund investments, insurance and credit card repayments. Till now, payments above Rs 15,000 require AFA.

“e-Mandates for making payments of recurring nature have become popular among customers. Under this framework, an additional factor of authentication (AFA) is currently required for recurring transactions exceeding ₹15,000. It is now proposed to enhance this limit to Rs 1 lakh per transaction for recurring payments of mutual fund subscriptions, insurance premium subscriptions and credit card repayments. This measure will further accelerate the usage of e-mandates,” the RBI governor said.

In another decision, the RBI also announced to set up a “Fintech Repository” for a better understanding of developments in the fintech ecosystem and support the sector.

“This will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. FinTechs would be encouraged to provide relevant information voluntarily to this Repository,” Das said.

Financial entities like banks and NBFCs in India are increasingly partnering with fintechs.

Das also said that the central bank is working on the establishment of a cloud facility for the financial sector in India.

Banks and financial entities are maintaining an ever-increasing volume of data.

Many of them are utilising cloud facilities for this purpose, he added. “The Reserve Bank is working on establishing a cloud facility for the financial sector in India for this purpose,” he said, adding such a facility would enhance data security, integrity, and privacy.

It will also facilitate better scalability and business continuity. Das said the cloud facility is intended to be rolled out in a calibrated fashion over the medium term.

Sachin Castelino, chief strategy and transformation officer of In-Solutions Global Ltd, said, “The RBI’s decision to increase the limit on UPI payments to healthcare and educational units from Rs 1 lakh to Rs 5 lakh is a significant move that addresses the evolving needs of these sectors. This allows for larger transactions, facilitating smoother financial operations for entities in healthcare and education. This decision will open new opportunities for seamless and substantial transactions within these critical domains.”

He added that the higher limit enhances the efficiency of UPI transactions, aligning with the growing demand for digital payments. It provides a more robust framework to facilitate transactions on behalf of businesses in healthcare and education, fostering ease of doing business. This decision by the RBI reflects a proactive approach to adapting digital payment systems to the specific requirements of key sectors, contributing to the overall advancement of India’s digital economy.