The Reserve Bank of India (RBI) has proposed introducing ‘delegated payments’ on Unified Payments Interface (UPI), the widely used digital payments platform.
The feature will allow multiple users to make UPI payments from a single primary bank account. The primary bank account holder can set transaction limits for secondary users linked to the UPI-enabled account.
“This product is expected to add to the reach and usage of digital payments across the country,” the RBI said. UPI has a user base of 424 million.
“Delegated Payments would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country. Detailed instructions will be issued shortly,” said the RBI in its monetary policy statement on Thursday.
The RBI has increased the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction, responding to the frequency and higher value of direct and indirect tax payments.
The increase in the limit of direct and indirect tax payments follows the regulator’s previous decisions to enhance UPI limits in sectors such as capital markets, IPO subscriptions, loan collections, insurance, medical and educational services.
In December, it raised the payment limit for hospitals and educational institutions to Rs 5 lakh per transaction from Rs 1 lakh.
Announcements around UPI come at a time when transaction volumes have continued to rise.
UPI reported a 45 per cent year-on-year (Y-o-Y) growth in transaction volume to reach 14.44 billion in July. The value of transactions grew 35 per cent Y-o-Y, totaling Rs 20.64 trillion, according to data released by the National Payments Corporation of India (NPCI). This marked the third consecutive month when the value of transactions exceeded Rs 20 trillion. Previously, UPI transaction values totaled Rs 20.07 trillion in June and Rs 20.44 trillion in May.
First Published: Aug 08 2024 | 3:46 PM IST
