In a bid to expand the scope of Unified Payments Interface (UPI) payments, the Reserve Bank of India (RBI) has increased the transaction limit for digital payment to hospitals and educational institutions to Rs 5 lakh. Earlier the limit was set at Rs 1 lakh per transaction.
While announcing the decisions of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das said, “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.”
The transaction limit for UPI payments for capital markets (AMC, broking, mutual funds, etc.), collections (credit card payments, loan re-payments, EMI), insurance, etc. was limited to Rs 2 lakh. In December 2021, the transaction limit for UPI payments for Retail Direct Scheme and IPO subscriptions was increased to Rs 5 lakh.
Now, UPI payment limit for healthcare and educational purposes have been hiked to Rs 5 lakh per transaction.
This move will help consumers to make UPI payments of higher amounts for education and healthcare purposes, Das said.
This initiative not only facilitates larger transactions in key sectors but also demonstrates the government’s commitment to harnessing digital finance as a tool for inclusive economic development.
The announcement signals a positive shift in the dynamics of financial transactions. This strategic decision holds the potential to bring about a transformative impact, especially in the context of healthcare. Both patients and hospitals stand to benefit significantly, as it addresses existing challenges in a new era of seamless and efficient transactions, say experts.
The announcement 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.
Another announcement regarding UPI is no additional factor of authentication (AFA) will be required for transactions of Rs 1 lakh for recurring payments of mutual fund subscriptions, insurance premium subscriptions and credit card repayments.
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