RBI Monetary Policy: UPI cap on IPO, gilt investments raised to Rs 5 lakh

BHIM is an Indian mobile payment app developed by the National Payments Corporation of India, based on the Unified Payments Interface.

Retail investors will now be able to make UPI (Unified Payments Interface) transactions of up to Rs 5 lakh for investments in government bonds under the RBI’s direct retail scheme as well as initial public offerings. The UPI limit was earlier set at Rs 2 lakh.

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At its bi-monthy monetary policy review on December 8, Reserve Bank of India Governor Shaktikanta Das acknowledged that UPI is the single-largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance, particularly for small-value payments.

In order to further deepen digital payments and make them more inclusive, ease transactions for consumers, facilitate greater participation of retail customers in various segments of financial markets and enhance the capacity of service providers, the RBI also proposed to launch UPI-based payment products for feature phone users. This would leverage on innovative products from the RBI’s Regulatory Sandbox on Retail Payments, the governor said.

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It has also proposed to make the process flow for small-value transactions “simpler” through ‘on-device’ wallet payments in UPI applications.

The governor said that the RBI has proposed to release a discussion paper on the back of concerns over various charges incurred by customers for payments through digital payment modes such as credit cards, debit cards, wallets and UPI.

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“It is proposed to release a discussion paper on various charges in the payment system to have a holistic view of the issues involved and possible approaches to mitigating the concerns so as to make digital transactions more affordable,” the governor said.