UPI transaction limits set for revision: What RBI decision means for you

The RBI has announced a revision of UPI transaction limits, allowing higher payment caps for Person-to-Merchant (P2M) transactions, while keeping Person-to-Person (P2P) payments capped at Rs 1 lakh

The Reserve Bank of India (RBI) on Wednesday announced an update to the transaction limits on the Unified Payments Interface (UPI), allowing for greater flexibility in both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments. Currently, the limit for UPI transactions is capped at Rs 1 lakh, with some P2M transactions allowing limits of Rs 2 lakh or Rs 5 lakh. Under the new guidelines, these limits will be revised based on evolving user needs, with appropriate security measures in place to mitigate risks associated with higher transaction amounts.

 

"To enable the ecosystem to respond efficiently to new use cases, it is proposed that NPCI, in consultation with banks and other stakeholders of the UPI ecosystem, may announce and revise such limits based on evolving user needs. Appropriate safeguards will be put in place to mitigate risks associated with higher limits. Banks shall continue to have the discretion to decide their own internal limits within the limits announced by NPCI," RBI said in a statement.  

P2P transactions on UPI shall continue to be capped at Rs 1 lakh, as hitherto. NPCI will be advised accordingly.

 

   

What Does This Mean for You?

1. Larger transactions made easier

For most users, the Rs 1 lakh cap on UPI payments has not been an issue. But as digital transactions grow, so do the needs of businesses and individuals. Whether you're paying for a high-ticket item, making a bulk payment, or engaging in larger financial transactions, the move to increase UPI transaction limits means you'll be able to do more through the same simple and secure platform.

 

For example, if you are running a small business or frequently making payments for goods or services worth more than ₹1 lakh, this new flexibility could save you from the hassle of splitting payments into multiple transactions. With a revised limit, UPI could become an even more convenient tool for larger payments.

 

"Currently, P2P UPI payments are capped at ₹1 lakh, and P2M payments at ₹3-5 lakh. The RBI wants to revisit these limits to accommodate new use cases. UPI payments are now accepted in select countries abroad, so this may be one of the use cases. On the whole, on the retail side, UPI payments are actually getting smaller. While transactions have grown 33% February-on-February to 16 billion payments moving ₹22 trillion for the month, the average UPI payment in February 2025 was ₹1364 compared to ₹1510 the previous February. This reveals that reliance on UPI for small-ticket payments is increasing," said Adhil Shetty, CEO of Bankbazaar.com

 

2. Security Measures to Keep You Safe

While the transaction limits are set to increase, the RBI and the National Payments Corporation of India (NPCI) have assured users that adequate safeguards will be in place to prevent fraud and mitigate risks. So, while you'll have the ability to make larger transactions, the security of your payments remains a top priority. These additional checks are designed to ensure that the growth in transaction limits does not compromise the safety and trust that users have come to expect from UPI.

 

You can expect additional layers of verification for large transactions, which may include two-factor authentication or even biometrics, to add extra security.

 

3. Bank-Specific Limits Still Apply

While NPCI will revise the overall transaction limits, each bank will still have the discretion to set its own internal limits. This means that while the system as a whole will be more flexible, your bank might have its own set of policies on how much you can transfer in a single UPI transaction. 

 

4. P2P Transactions Remain Unchanged

If you regularly transfer money to friends, family, or colleagues, you'll still be bound by the Rs 1 lakh limit for Person-to-Person (P2P) transactions. The cap for P2P payments will remain unchanged for now, so smaller, day-to-day transfers are unaffected by this new rule.