UPI transaction limit for education and healthcare hiked to ₹5 lakh per day

• Threshold for e-mandates that requires two factor authentication raised from ₹15,000 to ₹1 lakh.
  
• In the August policy update, Das has proposed introducing conversational payments on UPI.
  
• The RBI had also raised the transaction limit of UPI Lite to ₹500 from ₹200.
  

Reserve Bank of India Governor Shaktikanta Das announced on Friday an increase in the transaction limits for specific categories within the Unified Payments Interface (UPI). Additionally, new limits for e-mandates concerning recurring payments were also announced.

Under the updated UPI transaction limit regulations, individuals can now conduct payments via UPI up to ₹5 lakh per day, previously capped at ₹1 lakh, specifically for payments to hospitals and educational institutions.

“A key highlight is the adjustment in the UPI limit for transactions involving hospitals and educational institutions, raising it from ₹1 lakh to ₹5 lakh. This targeted policy measure acknowledges sector-specific financial needs, contributing to the macroeconomic resilience of critical segments. This could potentially result in increased financial transactions and ease,” says Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, a trading platform.

“Education expenses usually tend to be high and very time-bound. Increasing the UPI limit for education up to ₹5L means students and parents will be able to make immediate hassle-free cash payments without needing to resort to instruments such as demand drafts,” says Adhil Shetty, CEO, BankBazaar, a financial marketplace.

In the August policy update, Das has proposed introducing conversational payments on UPI, enabling users to interact with an AI-powered system for secure transaction initiation and completion.

This feature will be accessible on both smartphone and feature phone-based UPI platforms, initially supporting Hindi and English, followed by additional Indian languages.

The RBI had also raised the transaction limit of UPI Lite to ₹500 from ₹200. UPI Lite is accessible through various payment apps like Paytm, BHIM App, GooglePay, among others.

Several banks, including Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, and Utkarsh Small Finance Bank, are already active on the UPI Lite platform.

In November, digital transactions through the Unified Payments Interface (UPI) exceeded 11 billion for the second successive month, with the country witnessing 1.124 billion UPI transactions. As per data from the National Payments Corporation of India (NPCI), although UPI transactions dipped slightly from October's 1.141 billion, they surged by 54% compared to November 2022's 730.95 million transactions.