New UPI transaction rules from Nov 3: Here's what changes for users, banks

Processes will speed up payments and streamline refunds without altering settlement timelines

The rules for processing Unified Payments Interface (UPI) settlements will change from November 3 to make them faster and smoother for banks and users.

Why the change in UPI Settlements Rules?

UPI operates 10 settlement cycles daily, with both authorised payments (genuine transactions approved by users) and dispute settlements (reversals or refunds) processed together in each cycle.

 

With billions of monthly UPI transactions, mixing the two services types had slowed down settlement finalisation. The National Payments Corporation of India (NPCI), which manages UPI, has decided to separate the two categories.

What’s new in the settlement cycle

Under the revised framework:

 

As many as 10 daily cycles — from 9 am until 9 pm, in two-hour windows — will handle only authorised transactions.

 

 

A total of two cycles will be exclusively for dispute-related settlements:

 

• Daily cycle one: midnight to 4 pm

 

• Daily cycle two: 4 pm to midnight

Key points to note

No impact on cut-off timings: The change does not affect the existing Real Time Gross Settlement (RTGS) posting timelines.

 

Disputes now ring-fenced: Refunds and reversal settlements will be processed only in the two designated cycles.

 

Other rules remain the same: There is no change to reconciliation reports, GST reports, or other existing settlement procedures.

What it means for consumers

For most UPI users, payments at shops, online platforms or peer-to-peer transfers will continue to work as before. Transactions will reflect faster in banks’ systems because they are no longer competing with dispute settlements in the same batch.

 

However, if you raise a complaint, say a failed debit or a double charge, the refund may now be processed within one of the two dedicated dispute cycles. This could bring more predictability to when users see the money back in their accounts.

 

UPI in August handled more than 20 billion transactions amounting to Rs 24.85 trillion in value, according to NPCI. It was the first time the system crossed the 20 billion monthly transactions. By segregating settlements, NPCI is attempting to reduce bottlenecks, improve operational efficiency, and cut risks of settlement delays.

 

For banks, this means less congestion in reconciliation. For consumers, it translates into smoother payments and clearer timelines for refunds.