 "UPI transaction rules 2024: New regulations applicable from January 1")
To expand the scope of United Payments Interface (UPI), the Reserve Bank of India (RBI) announced several changes to rules and regulations around it in 2023. Many of these new rules for UPI payments have come into effect from January 1.
These changes include an increase in transaction limits to deactivate inactive UPI IDs.
UPI new rules: 5 key changes effective from January 1, 2024
UPI transaction limit hiked for hospitals, schools
In the bi-monthly Monetary Policy Committee (MPC) announcement, Shaktikanta Das, governor of the RBI, announced that the transaction limit for UPI payments made to hospitals and educational institutions has been hiked to Rs 5 lakh from Rs 1 lakh earlier. This was done to improve the adoption of UPI for online payments.
Deactivation of inactive UPI IDs
The National Payments Corporation of India (NPCI) has asked banks and mobile payment applications like Google Pay, Paytm, and PhonePe to deactivate the UPI IDs and numbers of the accounts that have been inactive for one year.
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"The decision has been taken to prevent the inadvertent transfer of money to unintended recipients in case customers change their mobile number without disassociating their old number from the banking system," the NPCI said in an announcement last year.
UPI Lite wallets transaction limit increased
The transaction limit for UPI Lite wallets has also been hiked from Rs 200 to Rs 500. These payments can be made by people without an internet connection. However, the maximum amount which can be transferred online is Rs 2,000.
No authentication for UPI auto payments
The RBI had also announced that UPI payments to Rs 1 lakh for credit card repayments, mutual fund subscriptions and insurance premiums will no longer require an additional factor authentication. Before the announcement, the limit of money that could be transferred without AFA authentication was Rs 15,000.
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Interchange fee on UPI merchant payments
The NPCI had last year announced the imposition of a 1.1 per cent interchange fee on UPI payments made by merchants. This fee is applicable on some merchant payments where the transaction value is less than Rs 2,000. The fees will not be applicable if the money transferred is higher than Rs 2,000.