The transaction limit for Unified Payments Interface (UPI) has been increased to ₹5 lakh for three specific types of payments. This change aims to enhance the convenience and flexibility of digital transactions.
The National Payments Corporation of India (NPCI) has officially raised the Unified Payments Interface (UPI) transaction limit to ₹5 lakh for certain types of payments. This adjustment aims to improve the flexibility and convenience of digital transactions for users. Previously, the transaction limit for Unified Payments Interface was set at ₹1 lakh, with a slightly higher limit of ₹2 lakh for specific categories such as capital markets, collections, insurance, and foreign inward remittances.
Enhanced UPI Transaction Limits: Specific Payment Categories
According to a circular issued by NPCI on August 24, 2024, the revised limit of ₹5 lakh per transaction will apply to the following categories:
- Tax Payments: UPI users can now make tax-related payments up to ₹5 lakh, providing a more streamlined and efficient method for settling large tax bills.
- Hospitals and Educational Institutions: Payments to hospitals and educational institutions, which often involve substantial sums, will benefit from the increased limit, making it easier for users to manage these significant expenses through Unified Payments Interface.
- IPOs and RBI Retail Direct Schemes: The new limit will also apply to transactions related to Initial Public Offerings (IPOs) and RBI Retail Direct schemes, facilitating larger investments and transactions in these financial products.
Effective Date and Compliance for New UPI Limits
The enhanced Unified Payments Interface transaction limit will come into effect on Monday, September 16, 2024. NPCI has directed all relevant stakeholders, including banks, payment service providers, and UPI apps, to comply with the new limits by Sunday, September 15, 2024. This timeline allows institutions to make the necessary adjustments to their systems and processes to accommodate the higher transaction limits.
Despite the increase, it is important for users to verify that their specific accounts and merchants are set up to handle the new limits. Individual banks may impose their own daily UPI transaction limits, which could differ from the new ₹5 lakh threshold. Therefore, users should check with their banks and UPI apps to confirm whether the new limit applies to their transactions.
Examples of Bank-Specific UPI Limits
For instance, according to Google Pay’s issuing bank-wise limits, Allahabad Bank currently has a Unified Payments Interface transaction limit of ₹25,000. On the other hand, major banks like HDFC Bank and ICICI Bank permit UPI transactions up to ₹1 lakh for peer-to-peer payments. Users should be aware of these variations and consult their banks to understand how the new ₹5 lakh limit will affect their transactions.
The increase in the Unified Payments Interface transaction limit is expected to enhance the overall user experience, especially for transactions involving large sums. By accommodating higher transaction amounts, NPCI aims to support the growing use of UPI for a wider range of payment scenarios, reinforcing its position as a preferred digital payment method in India.
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