Millions of Indians use UPI every day for monetary transactions. It is our strongest driver towards the goal of a robust cashless economy. Since it is an integral part of the digital payments ecosystem, the Reserve Bank of India (RBI) lays down policies and guidelines for strengthening it, improving security, and widening access. UPI new apps are all governed by these guidelines to ensure a consistent user experience, security, and compliance with regulatory standards.
The RBI periodically issues guidelines to protect the customers and maintain the financial system’s stability. Keeping up with the latest policies and changes is crucial to understanding their implications for you. Here is an overview of the recent RBI guidelines that every user must know.
RBI Guidelines for UPI
UPI, or Unified Payments Interface, is a revolutionary payments system introduced by the RBI in 2016. It allows swift, real-time fund transfers between two bank accounts. Users are assigned unique identifiers called Virtual Payment Address (VPA) to enable transactions without entering bank details. Every new UPI payment app has to adhere to the guidelines issued by the RBI regarding UPI.
- Payment Limit: The daily and per-transaction payment limit varies bank to bank. Generally, most banks have set this limit to ₹1,00,000 per day and the number of transactions to about 20. The RBI recently announced that the increased transaction limit for tax payments shall be ₹5 lakhs.
- UPI Circle: The National Payments Corporation of India (NPCI) recently issued the new service UPI Circle on BHIM UPI, in which a primary user with a bank account can authorise a trusted secondary user who does not have a bank account to make payments using the primary user’s UPI account. With the RBI’s approval, this service will be extended to other new UPI payment apps in the upcoming years.
- UPI123Pay Limit: The NPCI introduced the facility of UPI 123Pay, which allows feature phone users to avail of the UPI service without internet or a smartphone. Starting January 2025, the RBI raised the UPI 123Pay transaction limit to ₹10,000 and ₹20,000 daily. Users can now use SMS, missed calls, or IVR (interactive voice response) to use UPI on feature phones.
RBI Guidelines for UPI Lite
UPI Lite is a simplified version of UPI that enables you to make small digital payments quickly and offline. It is especially beneficial in areas with lower internet connectivity.
- In 2024, the RBI raised the limit per transaction from ₹500 to ₹1,000 for all UPI Lite payment apps.
- The balance limit for the UPI Lite wallet has risen from ₹2,000 to ₹5,000.
- These payments are handled quickly because they are conducted offline and don’t depend on mobile data. Additionally, they do not require a PIN or OTP.
RBI Guidelines for UPI Wallet
UPI wallets are prepaid digital wallets on a UPI app. The money balance in these wallets makes small transactions smoother, as the wallet is not linked to the bank account, and the payment takes place directly through the app.
- Wallets are a form of full-KYC PPI (Prepaid Payment Instruments). UPI new apps from banks and third-party providers facilitate payments to and from bank accounts. However, UPI transactions with PPIs can only occur through the mobile app supplied by the PPI provider.
- According to recent RBI guidelines, PPI issuers are required to enable full-KYC PPI holders to link their PPIs for UPI payments. Transactions made through the issuer’s app will use the customer’s PPI credentials for authentication.
- UPI payments can now be made using the wallets of third-party apps.
Conclusion
The RBI provides guidelines aimed at improving safety, speed, and scalability in digital payments across India. Updates for UPI, UPI Lite, and UPI wallets safeguard against fraud, improve user convenience, and encourage wider adoption.
Bajaj Finserv, with its new UPI payment app Bajaj Pay, is offering seamless UPI transaction services. You can ensure safe and prompt payments with features like UPI Lite and UPI wallet. Diligently adhering to the policies and guidelines laid out by the RBI, they ensure you get the best of what UPI offers.