New UPI Rules Starting Today: NPCI Sets New UPI Transaction Limits, Why Does It Matter?

The National Payments Corporation of India (NPCI) has unveiled a sweeping change in the various transaction limits applicable to UPI, extending its application beyond day-to-day retail payments to include large transactions across categories such as insurance, credit card bills, capital market investments, air travel and government services.

New rules, to be effective from today itself, substantially increase per-transaction and daily limits for certain merchant categories, turning UPI into a powerful Goody Two shoes when it comes to high-value payments.

Key Highlights of the New UPI Limits

1. Credit Card Bill Payments

- Per transaction: ₹5 lakh

- Daily cap: ₹6 lakh

2. Loan & EMI Collections 

- Per transaction: ₹5 lakh

- Daily cap: ₹10 lakh

3. Capital Market Investments & Insurance Premiums

- Earlier limit: ₹2 lakh

- New limit: ₹5 lakh per transaction

- Daily cap: ₹10 lakh

4. Travel Industry Payments

- Up to ₹5 lakh per transaction

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5. Government e-Marketplace (GeM) & Tax Payments

- Earlier limit: ₹1 lakh

- New limit: ₹5 lakh per transaction

6. Banking Services

- Term deposits (via digital onboarding): ₹5 lakh per transaction/per day (up from ₹2 lakh)

- Digital account opening: capped at ₹2 lakh (unchanged)

7. Foreign Exchange (via BBPS)

- Limit: ₹5 lakh per transaction

- Daily cap: ₹5 lakh

P2P (person to person) transactions, for cash out only, continue to be capped at ₹1 lakh per day. This was done so that the limit was balanced for both retail and non-retail users.

Before vs After: UPI Transaction Limit Changes

Why It Matters

• Convenience for users: No need to split large payments into small ones.
• High-value readiness: From insurance premiums to capital market investments, transactions can now be settled in real time.
• Push to digital economy: It allows the use of UPI for enterprise and government payments.
• Bank-level discretion: Banks can define their own UPI transaction limits based on their risk factor policies, even though NPCI has increased the limits. 

The Bigger Picture

The UPI, since its introduction, has revolutionised digital payments in India and crossed average of 10 billion transactions a month this year. With these expanded limits, UPI is transforming from being a micro-payments provider into an integrated digital infrastructure for regular retail transactions and high value financial transactions as well.

The move makes UPI a serious rival to card networks and net banking for big-ticket use cases, entrenching India’s lead as an innovator in digital payments.