UPI gets a major boost: RBI introduces delegated payments and raises tax payment limits
UPI gets a major boost: RBI introduces delegated payments and raises tax payment limits
The Reserve Bank of India (RBI) has announced two significant changes to the Unified Payments Interface (UPI) system this week, aimed at broadening its utility and user base.
One of the most notable updates is the introduction of the “Delegated Payments” feature, which allows a primary user to authorize another individual, referred to as the secondary user, to make UPI transactions from the primary user’s bank account. This can be done up to a specified limit, and crucially, the secondary user does not need to have a separate bank account linked to UPI.
RBI Governor Shaktikanta Das highlighted the potential of this new feature, stating, “This would enable an individual to allow another individual to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI.” This feature is expected to be particularly beneficial for demographics such as children and senior citizens, who may not have their own UPI-linked bank accounts, thereby significantly boosting UPI adoption.
The other major update from the RBI involves an increase in the transaction limit for tax payments via UPI. Previously capped at ₹1 lakh per transaction, the limit has now been raised to ₹5 lakh. This change is designed to make it easier for taxpayers to make larger payments digitally. While announcing this decision at the 50th meeting of the Monetary Policy Committee on Thursday, Governor Das remarked, “This will further ease tax payments by consumers through UPI.”
These updates have been met with positive reactions from key industry players. Dilip Asbe, CEO of the National Payments Corporation of India (NPCI), which operates UPI, took to social media, saying, “Never a dull moment for payment systems in India.” Similarly, PhonePe co-founder Sameer Nigam praised the Delegated Payments feature, predicting that it “will significantly accelerate UPI adoption by the next 300-400 million Indians.”
The combination of these enhancements is expected to drive greater usage of UPI, reinforcing its position as a cornerstone of digital payments in India.
