NPCI Authorized to Modify UPI Merchant Payment Limits: RBI
As part of a major step to facilitate high-value digital transactions, the Reserve Bank of India (RBI) has allowed the National Payments Corporation of India (NPCI) to modify the transaction limits of person-to-merchant (P2M) payments done using the Unified Payments Interface (UPI). This move, which RBI Governor Sanjay Malhotra announced on April 9 while undertaking the first monetary policy review for FY26, should add to the functionality of UPI in sectors like insurance, mutual funds, tourism, and luxury retail.
Currently, the UPI transaction cap for both person-to-person (P2P) and P2M payments stands at Rs 1 lakh, with exceptions of up to Rs 5 lakh for categories like education and healthcare. The RBI’s move now enables NPCI to consult with banks and relevant stakeholders to revise the P2M cap, allowing for selective higher-value transactions.
The central bank added that sufficient safeguards will be put in place to counteract risks involved, and banks will still have the freedom to define internal limits within the cap notified by NPCI. Significantly, the cap on P2P transactions will continue to be Rs 1 lakh.
The move reflects the increasing desire for convenient and secure digital payments further establishing UPI as a top payment platform in India's new digital economy.
