The Reserve Bank of India (RBI) has made a significant move to simplify and expedite high-value tax transactions by increasing the transaction limit for tax payments through the Unified Payments Interface (UPI) from Rs 1 lakh to Rs 5 lakh per transaction. The decision, announced by RBI Governor Shaktikanta Das, aims to make it easier for consumers to make tax payments using UPI.
Governor Das highlighted that the existing UPI cap of Rs 1 lakh has been subject to regular assessments and modifications for various transaction categories, including stock markets, IPO registrations, loan repayments, insurance, healthcare, and education services. With the recent update, tax payments, which are both common and substantial in amount, will now benefit from the raised threshold.
Beyond the increased transaction limit, the RBI has unveiled a fresh UPI attribute named ‘Delegated Payments’. This innovative functionality empowers a primary user to grant authorization to a secondary user to conduct UPI transactions within a set limit from the primary user’s bank account. Importantly, the secondary user is not required to possess a distinct UPI-linked bank account. This new feature is expected to enhance the uptake of digital payments by increasing convenience.
In addition to these developments, the RBI has announced various initiatives to improve the digital lending environment. One key step involves establishing a public database through a regulated organization to ensure accurate credit details. This database will be accessible to lenders, enabling them to obtain precise credit information. Lenders will now be required to submit credit details to Credit Information Companies (CIC) biweekly, ensuring faster updates for borrowers.
Further streamlining financial processes, the RBI is reducing the cheque clearance period from two business days to a few hours. This significant acceleration will lead to a more efficient and expedited clearance process.
