RBI hikes UPI payment limit for education, hospitals

Reserve Bank of India (RBI) increased the limits for certain types of transactions made through the popular Unified Payments Interface (UPI) platform and e-mandates that allow recurring online payments.

Specifically, the central bank said it will increase the per-transaction limit for payments made to educational institutions and hospitals using the UPI platform from the existing Rs 1 lakh to Rs 5 lakh.

The higher limit is expected to facilitate larger value payments for education and healthcare purposes via seamless UPI transactions.

“This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes,” RBI Governor Shaktikanta Das said in his monetary policy statement.

Similarly, under the e-mandate framework meant for recurring online transactions, the additional factor of authentication (AFA) threshold is being increased from Rs 15,000 to Rs 1 lakh per transaction for select categories.

These categories include recurring payments for mutual fund subscriptions, insurance premium renewals, and credit card bill payments. Customers already provide a one-time AFA while setting up the e-mandate, beyond which they don’t need to authenticate every payment.

By enhancing this limit from Rs 15,000 to Rs 1 lakh for specific categories, the process is expected to become more convenient even for higher value recurring transactions.

Experts said the move will accelerate adoption of e-mandates that save customers the trouble of manually making repeat payments every month for expenses like SIP investments, insurance premiums and credit card bills.

The RBI governor said that e-mandates for recurring transactions have become quite popular among customers, with many preferring this automated route. The increased limits are likely to further push many customers to opt for e-mandates and clock higher volumes.

Digital payments ecosystem players welcomed the move saying it could emerge as a game-changer for segments like mutual funds and insurance.

Experts said by proactively addressing potential limits in popular payment systems, the central bank is ensuring that growth in digital payments remains strong.

The increased limits for UPI and e-mandates announced today are expected to provide the necessary fillip.