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The Reserve Bank of India (RBI), in its Annual Report 2024–25 released Thursday, has rolled out a series of transformative digital payment initiatives aimed at expanding the reach, ease, and
innovation of India’s Unified Payments Interface (UPI). From enabling shared payments without bank account links to extending UPI globally, the central bank's initiatives mark a strategic
evolution of the digital finance ecosystem.
In a notable innovation, the RBI introduced ‘Delegated Payments’ or ‘UPI Circle’, which allows a primary UPI user to authorise another person to carry out transactions using the former’s
account, without needing the secondary user to have a UPI-linked bank account. “This payment solution, introduced in August 2024, will further deepen the reach and usage of digital
payments,” the RBI states in its report. This feature is expected to benefit families, domestic helpers, and small merchants who can now transact digitally without creating new accounts.
The RBI also announced a significant step towards inclusion by permitting Prepaid Payment Instrument (PPI) holders to use third-party UPI apps, thereby breaking the earlier limitation of
using only issuer-specific apps. According to the annual report, “This will enable PPI holders to make/receive UPI payments through third-party UPI applications,” which is especially helpful
for digital wallet users who want seamless access to broader UPI services.
To accelerate transaction capacity and adoption, the RBI enhanced UPI limits across various categories. “The per-transaction limit of UPI123Pay was increased to ₹10,000 from ₹5,000, UPI Lite
wallet limit of ₹500 per transaction and overall, per wallet limit of ₹2,000 were increased to ₹1,000 and ₹5,000, respectively, and the limit for tax payments via UPI was raised from ₹1
lakh to ₹5 lakh per transaction,” the report noted. These revisions encourage the use of UPI for small-feature phone users, everyday micro-transactions, and even high-value tax payments.
A powerful financial inclusion initiative was also rolled out with credit lines on UPI now extended to Small Finance Banks (SFBs). Highlighting the importance of access, the RBI said, “SFBs
leverage on a high-tech, low-cost model to reach the last-mile customer and can play an enabling role in expanding the reach of credit on UPI,” especially for underserved or ‘new-to-credit’
customers. These pre-sanctioned, low-ticket, short-tenure credit lines can now be accessed digitally, enhancing last-mile credit availability.
To further automate convenience, the RBI has brought auto-replenishment for FASTag, NCMC, and UPI Lite wallets under the e-mandate framework. As per the Annual Report, “UPI Lite was brought
within the ambit of the e-mandate framework by introducing an auto-replenishment facility if the balance goes below a threshold set by the customers.” This means users no longer need to
manually top up small-value wallets or transport-related balances, thus improving the user experience for recurring micropayments.
In a forward-looking move, the RBI enabled interoperable cash deposits via UPI. Banks' cash deposit machines (CDMs) can now accept UPI-based deposits, simplifying branch-free cash services.
According to the RBI, “Interoperable cash deposit facility using UPI has been enabled since June 2024,” making cash management easier and digitally accessible to customers.
RBI’s international ambitions for Indian payment systems are no less ambitious. Under its Payments Vision 2025, the central bank is expanding the global outreach of UPI and RuPay cards. The
report notes, “Acceptance of India’s UPI apps via QR code has been operationalised in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the U.A.E.,” providing Indian tourists and
NRIs the convenience of homegrown apps abroad. Moreover, the RBI has approved the deployment of UPI-like infrastructure in Namibia, Peru, Trinidad and Tobago, and Jamaica, with RuPay
acceptance already active in multiple countries.