Mumbai: 

UPI or Unified Payments Interface is a real-time payment system used for sending and receiving money between bank accounts using a mobile app.

At present, the transaction amount for UPI, covering both Person to Person (P2P) and Person to Merchant payments (P2M), is capped at Rs 1 lakh except for specific use cases of P2M payments which have higher limits, some at Rs 2 lakh and others at Rs 5 lakh.

“To enable the ecosystem to respond efficiently to new use cases, it is proposed that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs,” RBI Governor Sanjay Malhotra said.

The Reserve Bank of India (RBI) on Wednesday permitted NPCI to upwardly revise transaction limits in UPI for person-to-merchant payments (P2M) based on evolving user needs. National Payments Corporation of India (NPCI) is an umbrella organisation for operating retail payments and settlement systems in India.

Appropriate safeguards will be put in place to mitigate risks associated with higher limits, he added.

Governor Malhotra announced that the RBI proposes to review the guidelines for lending against gold jewellery.

Loans against the collateral of gold jewellery and ornaments are extended by regulated entities (REs) for both consumption and income-generation purposes.

Prudential and conduct related regulations for these types of loans have been issued from time to time and they vary for different categories of REs.

Banks shall continue to have the discretion to decide their own internal limits within the limits announced by NPCI, the governor added.

P2P transactions on UPI, however, will continue to be capped at Rs 1 lakh, as hitherto.

“With a view to harmonising such regulations across REs while keeping in view their risk-taking capabilities, and also to address a few concerns that have been observed, it has been decided to issue comprehensive regulations, on prudential norms and conduct related aspects, for such loans,” the governor said.

The draft guidelines in this regard will be issued for public comments.

The Reserve Bank has also proposed to make the Regulatory Sandbox (RS) framework ‘theme neutral’ and ‘on tap’ to foster continuous innovation and keep pace with the rapidly evolving fintech/regulatory landscape.

RBI has been operating the RS framework since 2019, and four specific thematic cohorts have been announced and completed till date.

An ‘on tap’ application facility for themes of closed cohorts was announced in October 2021.

A fifth ‘theme neutral’ cohort with a specified time window for receiving applications was also announced in October 2023, which will close in May 2025.

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