Why in news?
With record rise in Unified Payments Interface(UPI) transactions, Banks and UPI apps have decided to impose daily limits on UPI transactions on top of the limits set by the National Payments Corporation of India (NPCI) in 2021.
What Limits have been Imposed on UPI Transactions?
- Currently, users can make up to 20 transactions or ₹1 lakh in a single day, either all at once or throughout the day.
- Certain specific categories of transactions, such as capital markets, collections, insurance, and forward inward remittances, have a higher limit of ₹2 lakh.
- In December 2021, the limit for each transaction for UPI-based ASBA (Application Supported by Blocked Amount system) IPO and retail direct schemes was increased to ₹5 lakh.
Limits by Banks/Apps:
- Some banks and apps have set their own transaction limits.
- For example, Punjab National Bank (PNB) and Bank of Baroda have a lower limit of ₹25,000, with PNB’s daily limit being ₹50,000.
- Google Pay users face a breach of the daily limit if they attempt to send money more than ten times in a single day across all UPI apps.
What is the Significance of Limits?
- The imposition of limits helps maintain the security infrastructure of UPI and ensures its seamless functioning.
- Limits assist in preventing potential fraud and risk concerns while balancing customer convenience.
- Specific categories with higher average transaction values, such as capital markets or credit card bill payments, set higher limits.
What are the Most Recent Trends Observed with respect to UPI?
- In May,2023, the total number of transactions facilitated using UPI reached 9,415.19 million, with a combined value of ₹14.89 lakh crore.
- Share of P2P (peer-to-peer) transactions among total UPI transactions is about 43%, while the rest are P2M (peer-to-merchant).
- In the P2P category, the majority of transactions were in the below ₹500 bracket (54.2%), while in the P2M category, the share in the same amount bracket was 84.3%.
Read also:- Liberalized Remittance Scheme (LRS)
