New Delhi: The Reserve Bank of India has approved an increase in transaction limits for person-to-merchant (P2M) payments via UPI, allowing the National Payments Corporation of India (NPCI) to revise the cap in line with evolving user demands.

At present, most UPI transactions, including both person-to-person (P2P) and P2M payments, are capped at ₹1 lakh. However, certain use cases already enjoy higher limits of ₹2 lakh and ₹5 lakh. The new move is aimed at making the system more responsive to emerging payment needs, particularly in the merchant segment.

RBI Governor Sanjay Malhotra said, "It is suggested that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs to enable the ecosystem to respond efficiently to new use cases." He further noted that risks arising from higher transaction caps will be managed with proper safeguards.

While banks will continue to have the freedom to set their internal limits within the NPCI framework, the ₹1 lakh cap for P2P transactions will remain unchanged.

The governor also mentioned that the RBI is reviewing regulations for loans backed by gold jewellery, a product offered by various regulated entities for both personal consumption and income-generating purposes.

BI Bureau