RBI Raises UPI Payment Limit For Healthcare, Educational Services To Rs 5 Lakh

Governor Shaktikanta Das informed that the cap for e-mandates for recurring payments has also been increased to Rs 1 lakh, from the earlier limit of Rs 15,000. 

The banking regulator noted that it plans to establish a FinTech Repository to help create a better understanding of developments in the fintech ecosystem in the country and facilitate the sector.

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The Reserve Bank of India announced on Friday that it is increasing the UPI payment limit to Rs 5 lakh for payments made to hospitals and educational institutions. Currently, the UPI payments are capped at Rs 1 lakh and the revised limit applies only for healthcare and educational facilities. 

Revealing the decisions made in the Monetary Policy Committee’s (MPC) bi-monthly review meeting, Governor Shaktikanta Das announced that the regulator has decided to keep the repo rate unchanged at 6.5 per cent. Further, the Governor informed that the cap for e-mandates for recurring payments has also been increased to Rs 1 lakh, from the earlier limit of Rs 15,000. 

“The limit for various categories of Unified Payments Interface (UPI) transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.The enhanced limit will help consumers make UPI payments of higher amounts for education and healthcare purposes,” Das said during the announcement. 

E-Mandates For Recurring Payments

Regarding the e-mandates for conducting payments of a recurring nature, the Governor noted that the current framework demands an additional factor of authentication (AFA) for recurring transactions exceeding Rs 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,” he said, reported PTI. He stated that this measure should help accelerate the usage of e-mandates. 

FinTech Repository

Further, the banking regulator noted that it plans to establish a FinTech Repository to help create a better understanding of developments in the fintech ecosystem in the country and facilitate the sector. This Repository will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. The Governor urged the FinTechs to provide relevant information voluntarily to the Repository. Financial entities like banks and NBFCs in India are partnering with fintechs at an increasing pace.

Cloud Facility For Financial Sector

Regarding the financial sector in India, Das noted that the regulator is working towards developing a cloud facility for the industry. “Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India for this purpose. This would enhance data security, integrity, and privacy. It will also facilitate better scalability and business continuity,” the Governor said. He added that the regulator plans to rollout the cloud facility ‘in a calibrated fashion over the medium term’.