Rs 5 lakh UPI limit for payment to hospital and educational institution

Subject: Economy

Section: Monetary Policy

Context: Rs 5 lakh UPI limit for payment to hospital and educational institution

More about the news:

The Reserve Bank of India (RBI) has announced several regulatory measures in the UPI and fintech ecosystem, along with developments in the financial markets:
The UPI transaction limit for medical and educational services has been raised from Rs 1 lakh to Rs 5 lakh.
RBI has exempted e-mandates additional factor authentication (AFA) for transactions up to Rs 1 lakh for activities such as mutual fund subscriptions, insurance premium payments, and credit card bill payments.
Existing requirements like pre- and post-transaction notifications and opt-out facilities will continue.
RBI plans to establish a Fintech Repository to better understand developments in the fintech ecosystem. It will be operationalized by the Reserve Bank Innovation Hub by April 2024 or earlier.
RBI is working on setting up a cloud facility for the financial sector in India to enhance data security, integrity, privacy, scalability, and business continuity.
The rollout will be calibrated over the medium term.
A unified regulatory framework for connected lending for all regulated entities will be introduced, strengthening credit pricing and management.
RBI will establish a regulatory framework for the web-aggregation of loan products, aiming to enhance customer centricity and transparency in digital lending.

What is Unified Payments Interface (UPI):

The Unified Payments Interface (UPI) is a system that consolidates multiple bank accounts into a single mobile application provided by any participating bank.
Developed by the National Payments Corporation of India (NPCI), UPI serves as a payment system enabling seamless money transfers between any two bank accounts using a smartphone.
This payment interface allows customers to make direct payments from their bank accounts to various merchants, both online and offline, eliminating the need to input credit card details, IFSC codes, or net banking/wallet passwords.
UPI integrates numerous banking features, facilitating effortless fund routing and merchant payments within a unified framework.
UPI was launched in April 2016,and has gained significant popularity, becoming a preferred choice for users engaged in sending and receiving money.
Additionally, the platform addresses “Peer to Peer” collect requests, which can be scheduled and paid at the user’s convenience and as per specific requirements.