Currently, UPI transactions — both person-to-person (P2P) and P2M — are largely capped at ₹1 lakh. In some merchant categories such as education and healthcare, the cap is at ₹5 lakh.
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DEEPAK KR
Industry experts have welcomed the RBI’s proposal to revise UPI transaction limits for paying money to merchants (P2M) and expand its co-lending framework.
The central bank has allowed the National Payments Corporation of India (NPCI) to revise transaction limits for person-to-merchant (P2M) payments on the Unified Payments Interface (UPI), paving the way for select higher-value transactions.
Currently, UPI transactions — both person-to-person (P2P) and P2M — are largely capped at ₹1 lakh. In some merchant categories such as education and healthcare, the cap is at ₹5 lakh.
NPCI can now revise such these limits in consultation with banks and stakeholders. The revision in limits move is expected to support the growing demand for high-value digital transactions in sectors such as insurance, mutual funds, travel and high-end retail.
Vishwas Patel, Jt. MD, Infibeam Avenues, and Chairman of the Payments Council of India (PCI), said, “RBI’s move to empower NPCI to revise UPI transaction limits for merchant payments is a much-needed and welcome reform. It reflects a deep understanding of the changing needs of users and businesses alike. This flexibility will allow the ecosystem to cater to more high-value use cases like insurance premiums, education fees, B2B transactions, while still upholding safety. It’s a win-win for consumers, merchants, and payments players.”
Co-lending framework
The RBI has announced a major enhancement to its co-lending framework. Earlier restricted to partnerships between banks and NBFCs for priority sector lending, the updated policy now allows all regulated entities to enter into co-lending arrangements across all categories of loans. This move is designed to unlock the broader potential of co-lending collaborations within India’s financial landscape.
Extending co-lending rules to all regulated entities could prove to be a game changer for the domestic financial sector over time, noted experts.
“RBI’s recent framework on co-lending is the need of the hour. With the growing credit demand and now the reduced repo rate, to address the demand, the lending industry will have to come forward collectively (banks, NBFCs, fintech enablers) and pave way for more diverse partnerships between traditional lenders and agile, technology-driven platforms,” said Yashoraj Tyagi, CEO, CASHe.
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Published on April 9, 2025
