RBI Expands UPI Transaction Limits and Revises Lending Guidelines

The Reserve Bank of India (RBI) has permitted NPCI to raise UPI transaction limits for person-to-merchant payments, while maintaining a cap for person-to-person transfers. Additionally, RBI will harmonize lending regulations against gold jewelry and expand co-lending frameworks. A theme-neutral regulatory sandbox will also be introduced to foster fintech innovation.

In a move to enhance the evolving digital payment ecosystem, the Reserve Bank of India (RBI) on Wednesday allowed the National Payments Corporation of India (NPCI) to increase transaction limits for UPI payments made from person to merchant. This decision comes in response to changing user needs, noting that person-to-person transactions will remain capped at Rs 1 lakh.

RBI Governor Sanjay Malhotra also highlighted the need to harmonize regulations for loans against gold, introducing comprehensive guidelines to synchronize prudential norms across various regulated entities. The guidelines aim to address inconsistencies observed in current practices across the sector.

Further, the RBI is set to make its Regulatory Sandbox (RS) framework 'theme neutral' and continually open for applications, promoting innovation in the fintech landscape. Draft frameworks for securitization of stressed assets and new co-lending arrangements among regulated entities are under development, aiming to address emerging financial sector needs efficiently.

(With inputs from agencies.)