P2P transactions on UPI shall continue to be capped at ₹1 lakh
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KAMAL NARANG
The Reserve Bank of India (RBI) has asked the National Payments Corporation of India (NPCI) to review and revise the limit on person-to-merchant (P2M) transactions made using Unified Payments Interface (UPI), Governor Sanjay Malhotra said on Wednesday.
At present, the transaction amount for UPI, covering both Person to Person (P2P) and P2M, is capped at ₹1 lakh, except for specific use cases of P2M payments which have higher limits, some at ₹2 lakh and others at ₹5 lakh.
“To enable the ecosystem to respond efficiently to new use cases, it is proposed that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs. Appropriate safeguards will be put in place to mitigate risks associated with higher limits. Banks shall continue to have the discretion to decide their own internal limits within the limits announced by NPCI,” the RBI said, adding that P2P transactions on UPI shall continue to be capped at ₹1 lakh.
Vishwas Patel, Jt MD, Infibeam Avenues, and Chairman of the Payments Council of India, said the RBI’s move 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,” he said.
Expands potential
Ankush Julka, CEO at Mufinpay, said India’s digital payments space is evolving fast and the move to reassess UPI transaction limits comes at the right time. Right now, most UPI transactions — whether between individuals or from customers to merchants— are capped at ₹1 lakh. While that works for daily expenses, he said, it can feel limiting when it comes to larger, legitimate purchases like hospital bills, education fees or even premium electronics.
“By allowing higher limits for specific use cases, such as ₹2 lakh or even ₹5 lakh, the system expands its potential without compromising UPI’s core benefits of real-time, reliable, and user-friendly transfers. This change provides consumers with greater spending freedom and merchants with the opportunity to increase average order values and attract more digital-first customers,” he said.
UPI set a new record in March, registering a total of 18.30 billion transactions amounting to ₹24.77 lakh crore, per NPCI data.
Published on April 9, 2025
