RBI has proposed new limits for some UPI transaction categories and e-mandates for recurring payments

The Reserve Bank of India (RBI) has put forth a proposal to modify transaction limits for the Unified Payments Interface (UPI) in specific categories, along with adjustments to the limits for e-mandates governing recurring online transactions.

RBI Governor Shaktikanta Das said UPI has witnessed a surge in popularity, with a current transaction cap of Rs 1 lakh, except for certain categories like Capital Markets, Collections, and Insurance, where the limit is Rs 2 lakh.

It may be noted that in December 2021, the transaction limit for UPI payments for Retail Direct Scheme and IPO subscriptions was increased to Rs 5 lakh. Now, RBI has proposed the same limit for medical and educational services.

“To encourage the use of UPI for medical and educational services, it is proposed to enhance the limit for payments to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction,” the RBI Governor said.

Additionally, the RBI has also proposed to enhance limits for e-mandates in specified categories of recurring payments such as subscription to mutual funds, payment of insurance premiums, and credit card bill payments.

“The framework for processing of e-mandates for recurring transactions was introduced in August 2019 to balance the safety and security of digital transactions with customer convenience. The limits for the execution of e-mandates without the Additional Factor of Authentication (AFA) currently stands at Rs 15,000/- (last updated in June 2022),” the RBI Governor said.

He added that the number of e-mandates registered currently stands at 8.5 crore, processing nearly Rs 2,800 crore of transactions per month. However, in categories such as subscription to mutual funds, payment of insurance premium and credit card bill payments – with transaction sizes of more than Rs 15,000 – adoption has been lagging, said Shaktikanta Das.

“It is, therefore, proposed to exempt the requirement of AFA for transactions up to Rs 1 lakh for the following categories, viz., subscription to mutual funds, payment of insurance premium and payments of credit card bills. The other existing requirements such as pre- and post-transaction notifications, opt-out facility for user, etc. shall continue to apply to these transactions. The revised circular will be issued shortly,” he added.