In a significant move aimed at expanding the utility of Unified Payments Interface (UPI), the Reserve Bank of India (RBI) announced that it has increased the transaction limit for UPI payments to hospitals and educational institutions to Rs 5 lakh, up from the previous limit of Rs 1 lakh.
During the announcement of the Monetary Policy Committee (MPC) decisions, RBI Governor Shaktikanta Das highlighted the ongoing reviews of UPI transaction limits and stated, “The limit for various categories of UPI transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.”
Previously, the UPI transaction limit was capped at Rs 1 lakh per transaction, with exceptions for specific categories. For payments related to capital markets (AMC, broking, mutual funds, etc.), collections (credit card payments, loan repayments, EMI), and insurance, the limit was set at Rs 2 lakh. Notably, in December 2021, the transaction limit for UPI payments for the Retail Direct Scheme and IPO subscriptions was raised to Rs 5 lakh.
With this recent update, the UPI payment limit for healthcare and educational purposes has been elevated to Rs 5 lakh per transaction. This adjustment is expected to empower consumers to conduct UPI transactions of higher amounts for education and healthcare needs, according to Governor Das.
Harish Prasad, Head of Banking at FIS, India, commented on the development, stating, “The announcement of the increase of per-transaction limits to Rs 5 lakh for UPI payments to hospitals and educational institutions puts such transactions in the same bracket as financial investments into IPO which currently qualify for the higher limit. This opens up UPI use to a large set of higher-value fees and medical payments which currently see large volumes exceeding the Rs 1-lakh limit. This has the potential to further impact the use of Debit cards which were often used for such transactions.”
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