RBI increases UPI 123Pay and UPI Lite limit in MPC meeting

This move, as stated by RBI Governor Shaktikanta Das during the monetary policy committee (MPC) meeting, is aimed at boosting the adoption of UPI and making the payment system more inclusive.

Additionally, the central bank raised the UPI Lite wallet limit from Rs 2,000 to Rs 5,000 and increased the per-transaction limit for UPI Lite from Rs 500 to Rs 1,000, further enhancing the convenience for users of the system.

In another development, the RBI introduced a beneficiary verification system for Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems.

Previously, this feature was only available for UPI and Immediate Payment Service (IMPS).

The new verification system will allow remitters to confirm the name of the account holder before making a fund transfer through RTGS or NEFT, reducing the chances of incorrect transfers and fraud.

Governor Das emphasized that this system would help minimize errors in fund transfers and enhance security.

During the October MPC meeting, the RBI chose to maintain the repo rate at 6.5 percent, despite the recent 50-basis point rate cut by the US Federal Reserve.

This decision is in line with the RBI's change in policy stance from "withdrawal of accommodation" to a more "neutral" approach, providing greater flexibility in responding to economic conditions.

The UPI network, managed by the National Payments Corporation of India (NPCI), continued to demonstrate robust growth, processing over 500 million daily transactions in September 2024.

Data from NPCI, released on Oct. 1, revealed that UPI transaction values exceeded Rs 20 lakh crore for the fifth consecutive month.

The average daily transaction value in September was Rs 68,800 crore, compared to Rs 66,475 crore in August, and UPI transactions grew by 31 percent on year-on-year (YoY) basis, reaching Rs 20.64 lakh crore, continuing a strong trend of double-digit growth.

This expansion of limits and continued growth in digital payments reflects the RBI's commitment to advancing financial inclusion and encouraging the widespread adoption of UPI in India.