In a significant move during the latest RBI MPC meeting, the Reserve Bank of India (RBI) has announced a major shift in the Unified Payments Interface (UPI) system. The six-member committee decided to keep the repo rate untouched, but amidst this, Governor Shaktikanta Das unveiled a pivotal update concerning UPI.
UPI Payment Limit Amplified
The RBI’s Monetary Policy Committee (MPC) has maintained the repo rate for the ninth consecutive time. However, Governor Shaktikanta Das introduced a significant adjustment to the UPI framework, allowing tax payments up to ₹5 lakh through UPI—a notable increase from the previous ₹1 lakh cap. This change, aimed at bolstering digital payments, was elaborated upon as part of the broader discussion on the repo rate, inflation, and GDP during the MPC meeting.
Previously, the UPI payment ceiling stood at ₹1 lakh per transaction. Governor Das emphasized that this enhancement will further promote the adoption of digital transactions. It’s crucial to note that, under the current UPI Payment Limits, transactions are capped at ₹1 lakh for general payments, ₹2 lakh for capital market and insurance transactions, and ₹5 lakh per transaction for IPO applications.
UPI: A Step Towards Delegated Payments
In addition to increasing the tax payment limit, the RBI Governor discussed another forthcoming transformation in the UPI landscape—the introduction of delegated payments. This feature will empower UPI users to authorize another individual to execute payments from their accounts, streamlining the payment process.
Economic Forecast: Stability in GDP Growth
While maintaining the repo rate at 6.50%, Governor Das also reaffirmed the GDP forecast for the fiscal year 2024-25, keeping it steady at 7.2% for nominal GDP growth. The quarterly GDP growth projections remain as follows:
- Q1: 7.1%
- Q2: 7.2%
- Q3: 7.3%
- Q4: 7.2%
Additional Proposals: Swift Check Clearance
During the MPC meeting, aside from the UPI tax payment update, another critical issue discussed was the duration of check clearance. The proposal now seeks to expedite the check clearance process to just a few hours, reflecting the RBI’s ongoing commitment to enhancing the efficiency of financial transactions in India.
