RBI Increases UPI P2M Payment Limit to ₹5 Lakh
New Delhi – The Reserve Bank of India (RBI) has announced a significant increase in the payment limit for Person-to-Merchant (P2M) transactions using the Unified Payments Interface (UPI), enabling customers to make larger digital payments.
UPI Now Easier for Larger Purchases
RBI Governor Sanjay Malhotra, during the monetary policy review, stated that customers can now conduct UPI transactions up to ₹2 lakh for capital markets, insurance, and other sectors, and up to ₹5 lakh for taxes, hospitals, education, and IPOs. Previously, the limit for these sectors was ₹2 lakh, which has now been raised for specific instances.
No Change in P2P Limit
However, the existing ₹1 lakh limit for Person-to-Person (P2P) transactions remains unchanged. This enhanced limit applies only to P2M transactions, allowing retailers and small merchants to process larger transactions digitally.
Benefits for Merchants and Customers
This decision will benefit both merchants and customers. Customers can now conveniently purchase high-value goods and services such as jewelry, expensive electronics, or healthcare services via UPI. This is expected to reduce cash transactions and strengthen the digital economy.
NPCI Granted Flexibility in Setting Limits
According to the RBI, the National Payments Corporation of India (NPCI), in consultation with other stakeholders, can adjust the UPI limits in the future to meet evolving needs. Banks will also have the flexibility to set their internal limits within the framework defined by the NPCI.
