MPC increases UPI tax payment limit from Rs 1 lakh to Rs 5 lakh per transaction

UPI transaction limit: Reserve Bank of India (RBI) on Thursday announced key reforms to boost customer protection, transparency, and efficiency in digital lending and payment systems.

Unified Payments Interface (UPI), which has gained significance for its convenience, at present has a transaction limit of Rs 1 lakh. RBI plans to increase this limit to Rs 5 lakh for tax payments me via UPI.  This increase in limit has been me to support frequent and high-value nature of both direct and indirect tax payments. RBI will provide furr details on increase in UPI tax limit in its furr announcements.

With existing 424 million users, Reserve Bank of India (RBI) is targeting furr expansion of Unified Payments Interface (UPI) user base. 

RBI is proposing a new feature called "Delegated Payments," which would enable a primary user to set a UPI transaction limit for a secondary user on ir bank account. This initiative aims to enhance option of digital payments across India.

Cheque Truncation System

RBI is aiming to improve efficiency and customer experience of Cheque Truncation System (CTS) by transitioning to a continuous clearing model with ‘on-realisation-settlement.’

Currently, CTS processes cheques within a clearing cycle of up to two working days. Under new system, cheques will be scanned, presented, and cleared within a few hours during business hours, significantly shortening clearing cycle from T+1 days to just a few hours. Detailed guidelines on implementation will be shared soon.

As part of its ongoing efforts to fortify financial system and safeguard consumer interests, RBI is establishing a public repository for Digital Lending Apps (DLAs) linked to RBI-regulated entities. 

This move follows RBI's guidelines issued on September 2, 2022, which dressed issues related to customer protection, data privacy, interest rates, recovery practices, and mis-selling. 

Despite se measures, unregulated apps falsely claiming affiliation with RBI-regulated entities have continued to emerge. new repository will help customers verify aunticity of DLAs by referencing data submitted directly by regulated entities. 

It will be available on RBI's website and updated regularly as new apps are ded or removed. Furr details on repository will be provided soon.