RBI Permits NPCI to Enhance UPI Transaction Limits for P2M Payments

The Reserve Bank of India (RBI), on April 9, 2025, announced a major step in India’s digital payments landscape by authorizing the National Payments Corporation of India (NPCI) to revise transaction limits for UPI-based Person-to-Merchant (P2M) payments. This move comes in response to evolving user demands and use cases in the UPI ecosystem. However, Person-to-Person (P2P) transaction limits remain unchanged at ₹1 lakh.

Key Highlights

RBI Decision

• RBI has permitted NPCI to revise P2M transaction limits under UPI as per evolving use cases and user needs.
• Banks will have the discretion to set internal limits within the range announced by NPCI.

Current Transaction Caps

• General UPI limit: ₹1 lakh for both P2P and P2M.

Exceptions (P2M only): Up to ₹2 lakh or ₹5 lakh in specific use cases such as,

• Education
• Healthcare
• Credit card bill payments (via UPI)

P2P Payments

• Cap remains unchanged at ₹1 lakh.

Rationale

• To allow greater flexibility for merchants and users amid growing adoption of digital payments.
• To support innovation and adoption in the fintech space.

Risk Management

• Appropriate safeguards will be implemented to manage risks from higher limits.

Additional Announcements by RBI

Gold Loan Guidelines

• RBI will issue comprehensive prudential and conduct norms to harmonize regulations for loans against gold jewellery across all regulated entities (REs).
• Draft guidelines to be released for public consultation.

Regulatory Sandbox (RS)

• RS will now be theme-neutral and ‘on tap’, allowing continuous innovation.
• Earlier cohorts were based on specific themes with fixed timelines.
• The change is aimed at keeping pace with the dynamic fintech ecosystem.

Securitisation of Stressed Assets

• Draft framework will be introduced to enable a market-based mechanism for securitising stressed assets, beyond the current ARC route under SARFAESI Act, 2002.

Co-Lending Framework Expansion

• RBI plans to expand co-lending beyond banks and NBFCs.
• A generic regulatory framework for all types of co-lending among REs will be developed.
• Objective: to widen access to credit and foster sustainable lending partnerships.

Summary/Static	Details
Why in the news?	RBI Permits NPCI to Enhance UPI Transaction Limits for P2M Payments
Authority	Reserve Bank of India (RBI)
Key Decision	NPCI permitted to revise UPI P2M transaction limits
Current UPI Cap	₹1 lakh (general); higher for select P2M cases (₹2 lakh or ₹5 lakh)
P2P Limit	Remains capped at ₹1 lakh
NPCI Role	To consult with stakeholders and announce new limits
Safeguards	Risk mitigation measures to be in place
Gold Loans	New harmonized regulatory guidelines to be introduced
Regulatory Sandbox	To become theme-neutral and on tap for constant innovation