The Reserve Bank of India on Wednesday proposed to enhance the transaction limit for payments through UPI for retail buying of government securities and IPO applications from Rs 2 lakh to Rs 5 lakh.
Currently, investors who bid for primary market issues have to mandatorily apply via unified payment interface (UPI). But the transaction limit has been kept at Rs 2 lakh for them.
“Over time, UPI has also become a popular payment option for Initial Public Offerings (IPOs) since its availability from January 01, 2019. It is reported that IPO applications of Rs 2 to Rs 5 lakh constitute approximately 10 per cent of subscription applications” the central bank said in a statement.
The Bank did not specify the day from which it will be applicable and added that a separate instruction to NPCI will be issued shortly.
The Reserve Bank has been making efforts to facilitate greater participation of retail customers in financial markets. It recently allowed investment in the G-Secs segment by launching Retail Direct Scheme, where UPI, in addition to other options such as internet banking, can be used to make payments.
Besides the changes in IPO investment, the central bank also proposed to launch UPI-based payment products for feature phone users and make the process flow for small value transactions simpler through a mechanism of ‘on-device’ wallet in UPI applications.
UPI is the single largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance, particularly for small value payments.
Source: Economic Times
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