NPCI Sets Deadline For Banks and PSPs To Meet Regulator's Directive Of Increasing UPI Transaction Limit

The National Payments Corporation of India (NPCI) has set the deadline for banks and payment service providers (PSPs) to follow the directive to increase the UPI transaction limit to Rs 5 lakh for transactions to hospitals and educational services by January 10, as reported by Business Standard.

NPCI has been urging banks, PSPs, and UPI applications to raise the transaction limit to hospitals and educational services to Rs 5 lakh, a significant increase from the previous limit of around Rs 1 lakh. This means, by January 10, PSPs, banks, UPI apps, and merchants are required to activate UPI with these enhanced limits, and the responsibility of verifying and adding merchants to the verified list lies with acquiring entities after conducting due diligence as the increased transaction limit of Rs 5 lakh applies only to “verified merchants.”

PhonePe has expressed confidence that they could implement the necessary changes within the provided timelines as a third-party application provider (TPAP), with the variation that they do not handle the due diligence for merchants as the merchant acquirer responsible for that process. However, PhonePe, acting as an acquirer, also has its own internal due diligence process to ensure compliance with regulatory requirements.

Experts have welcomed the move, saying these sectors deserving such an elevated limit and implementing these changes by January 10th would not be a cumbersome task for banks and other financial institutions.