a) launch UPI-based payment products for feature phone users, leveraging innovative products from RBI’s regulatory sandbox on retail payments;
(b) simplifying the process flow for small value transactions through a mechanism of ‘on-device’ wallets in UPI applications;
According to the RBI Governor’s statement, “UPI is the largest retail payment system in the country in terms of transaction volume, reflecting its wide acceptance especially for small value payments. To further deepen digital payments and To make them more inclusive, make transactions easier for consumers, facilitate greater participation of retail customers in various segments of financial markets and enhance the capacity of service providers, it is proposed to have a regulatory sandbox on retail payments; ( ii) simplifying the process flow for small value transactions through a mechanism of ‘on-device’ wallets in UPI applications; and (iii) raising the transaction limit for payments through UPI for Retail Direct scheme Investments in Government securities and Initial Public Offering (IPO) applications ranging from Rs 2 lakh to Rs 5 lakh.
In its statement on developmental and regulatory policies, “The Reserve Bank is making efforts to facilitate greater participation of retail customers in financial markets, for example through investments in the government securities sector.”
The recent launch of the Retail Direct scheme, where UPI, among other options like Internet Banking, can be used to make payments in participating both primary and secondary markets. Over time, UPI has also become a popular payment option for Initial Public Offering (IPO) since its availability from January 01, 2019. this is
The report said that IPO applications worth Rs 2 to 5 lakh are around 10 per cent of membership applications. The transaction limit in the UPI system was increased from Rs 1 lakh to Rs 2 lakh in March 2020. To further encourage the use of UPI by retail investors, it is proposed to increase the transaction limit for payment through UPI for Retail Direct Scheme and IPO. Applications from Rs 2 lakh to Rs 5 lakh. Separate instructions will be issued to NPCI soon.”
“UPI is the largest retail payment system in the country in terms of volumes,” the statement said.
Transactions (14 crore transactions per day, October 2021). One of the early purposes of UPI was to replace cash for low value transactions. Transaction data analysis shows that 50 per cent transactions through UPI were less than Rs 200, indicating its success. However, these are low value transactions, use up significant system capacity and resources, at times causing inconvenience to customers due to failure of transactions due to connectivity related issues. Therefore, the UPI app is proposed to offer a simplified process flow by enabling small value transactions through “on-device” wallets that will conserve the system resources of banks, without any changes.
transaction experience for the user.”
Vijay Singhania, President, TradeSmart, a discount brokerage firm, says, “RBI has proposed to increase the Unified Payment Interface (UPI) transaction limit for investment in IPOs from Rs 2 lakh to Rs 5 lakh, which is a step in widening it. Important step. Primary market investor base. Till now, this facility was mainly available to retail investors, who are classified as investing up to Rs 2 lakh in IPOs. By raising the limit, the market is now getting higher net worth The National Payments Corporation of India (NPCI), the umbrella organization for retail payments, recently reported that over 7.6 million mandates were created in November, compared to only 1.14 million in the previous month. This move by RBI will help increase these numbers further.”
Read also: All you need to know about RBI Retail Direct Scheme
Read also: How to register on RBI Retail Direct Scheme website
Read also: Advantages and Disadvantages of Investing in RBI Retail Direct Scheme
How does UPI work?
It allows transfer of funds from one bank account to another bank account instantly through one’s mobile phone. Payment can be done through an app such as BHIM, phonepe, guppies etc. only on mobile devices. Money transfer through UPI works on 24×7 basis.
A person must have a bank account with a member bank to be able to use the UPI facility. Member banks include State Bank of India (SBI), HDFC Bank and ICICI Bank.
Read also: How UPI Works