Mumbai, April 9 (PTI) (PTI) Reserve Bank on Wednesday allowed NPCI to rise to transaction restrictions in UPI to be based on evolving user needs to obtain person-to-person payments (P2M).
National Payment Corporation of India (NPCI) is an umbrella organization that operates retail payment and settlement systems in India.
UPI or unified payment interface is a real-time payment system used to send and receive funds between bank accounts using mobile applications.
Currently, the transaction amount of UPI, covering individual (P2P) and merchant payments (P2M) has been capped ₹In addition to the specific use exceptions for P2M payments with higher limits, there are 1 million ₹20 million and others ₹500,000.
“To make the ecosystem respond effectively to new use cases, it is recommended that NPCI consult with banks and other stakeholders of the UPI ecosystem that may announce and modify such restrictions based on evolving user needs,” said RBI Governor Sanjay Malhotra.
He added that appropriate safeguards will be established to mitigate the risks associated with higher restrictions.
The governor added that banks should continue to have discretion to decide their own internal restrictions within the restrictions announced by the NPCI.
However, P2P transactions on UPI will continue to be capped ₹So far, there are 100,000.
Governor Malhotra announced that the Reserve Bank of India (RBI) proposed review of lending guidelines for gold jewelry.
Loans for collateral for gold jewelry and decorations are extended by the Regulated Entity (RES) for consumption and income purposes.
Prudential and conduct-related regulations for these types of loans are issued from time to time, which vary in different categories of RES.
“In order to keep such regulations across the RES at the same time consider their risk-taking capabilities and address some of the issues that have been observed, it has been decided to issue comprehensive regulations, prudent norms and behavior-related aspects for such loans.”
The draft guidance in this regard will be made public.
The Reserve Bank also proposes to produce the regulatory sandbox (RS) framework “theme neutral” and “click” to promote continuous innovation and keep pace with the rapidly growing fintech/regulatory landscape.
The Reserve Bank of India (RBI) has been operating the RS framework since 2019 and has announced and completed four specific topic queues.
In October 2021, a “click” application facility for closed population themes was announced.
In October 2023, to be closed in May 2025, the queue’s fifth “topic neutral” queue also announced a designated time window for receiving application.
Under this cohort, if found to be eligible, you can test any innovative product or solution within the RBI regulation range.
“Based on stakeholder experience and feedback received, it is now recommended to regulate the sandbox ‘theme neutral’ and ‘tap’.”
The central bank will also issue a draft framework for pressure asset securitization. The proposed framework aims to achieve securitization of stressful assets through market-based mechanisms, in addition to existing ARC routes under the Sarfaesi Act of 2002.
The governor also announced a decision to expand the scope of common loans and issued a common regulatory framework for all forms of co-arrangement between RES.
The existing common loan guide is only applicable to arrangements for priority sector loans between banks and NBFCs.
“Given the development of this lending practice and the potential of such lending arrangements to meet the credit needs of a wider segment in a sustainable way, it has decided to expand the scope of co-loans and issue a general regulatory framework between RES for all forms of co-arrangements,” he said.
The Reserve Bank of India will issue a draft guideline on the framework for common arrangements.
