RBI's Latest Monetary Policy: Enhanced UPI Limits, Delegated Payments, and Steady Economic Growth Projections
Image: UPI Payments
Image Courtesy: Shutterstock
In its latest monetary policy announcement, the Reserve Bank of India (RBI) introduced several key updates aimed at boosting digital payments and maintaining economic stability.
The central bank has raised the UPI transaction limit for tax payments and introduced a new delegated payments feature in UPI.
Additionally, the RBI has kept the repo rate unchanged and provided updated projections for GDP growth.
This blog will explore these announcements in detail, highlighting their implications for consumers, businesses, and the overall economy.
RBI Increases UPI Transaction Limit for Tax Payments
During the announcement of the monetary policy statement, RBI Governor Shaktikanta Das revealed that the transaction limit for UPI (Unified Payments Interface) payments related to taxes will be increased.
Image: RBI Governor Shaktikanta Das
Image Courtesy: IndianbankingNews
"Currently, the transaction limit for UPI is ₹1 lakh except for certain categories of payments which have a higher transaction limit. It has now been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. This will further ease payments for consumers through UPI,”
he stated.
This move aims to make tax payments more convenient and seamless for individuals and businesses.
Expanded UPI Capabilities for Hospitals and Educational Institutions
It's important to note that in December 2023, the RBI had already increased the UPI transaction limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh.
This adjustment was made to accommodate the growing use of UPI for high-value transactions in these essential sectors, reflecting the increasing reliance on digital payment systems.
Introduction of Delegated Payments in UPI
In a move to further expand the reach and utility of UPI, Governor Das introduced the concept of delegated payments.
"It is proposed to introduce a facility of delegated payments in the UPI. This would enable an individual, i.e., a primary user, to allow another individual, namely a secondary user, to make UPI transactions up to a limit to be set by the primary user from the primary user's bank account without the need for the secondary user to have a separate bank account linked to UPI. This would further deepen the reach and usage of digital payments, in particular UPI,”
he explained.
This new feature will allow greater flexibility in managing digital payments, especially for families and businesses where multiple people may need to make transactions from a single account.
Repo Rate and GDP Growth Projections
In addition to the updates on UPI, the RBI decided to keep the repo rate unchanged at 6.5%. This decision was made to maintain economic stability and support ongoing growth.
The central bank also retained its real GDP growth forecast for the fiscal year 2025 at 7.2%. However, there was a slight adjustment in the projection for Q1, which was revised from 7.3% to 7.1%.
The forecasts for Q2, Q3, and Q4 were maintained at 7.2%, 7.3%, and 7.2%, respectively. Looking ahead to FY26, the GDP growth forecast remains steady at 7.2%.
Conclusion
The latest monetary policy updates from the RBI reflect a commitment to enhancing the digital payments ecosystem while maintaining economic stability.
By increasing the UPI transaction limit for tax payments and introducing delegated payments, the RBI is making it easier for consumers and businesses to manage their financial transactions.
At the same time, the decision to keep the repo rate steady and the optimistic GDP growth projections underscore the central bank's confidence in the country's economic resilience.
These measures are likely to have a positive impact on the economy, encouraging greater adoption of digital payments and supporting sustained growth in the years ahead.
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