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The Reserve Bank of India (RBI) took significant steps to enhance digital payment services and maintain monetary stability during its recent policy meeting. The central bank announced an increase in the transaction limit for UPI123Pay, a service designed for feature phone users, from Rs 5,000 to Rs 10,000. This move aims to encourage wider adoption of UPI among less tech-savvy individuals and make digital payments more accessible to a broader population. Simultaneously, the RBI also raised the UPI Lite wallet limit from Rs 2,000 to Rs 5,000 and increased the per-transaction limit for UPI Lite from Rs 500 to Rs 1,000. This adjustment further strengthens UPI Lite as a convenient and secure option for small-value transactions.
Beyond the adjustments to UPI limits, the RBI introduced a beneficiary verification system for Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems. This system, previously available only for UPI and Immediate Payment Service (IMPS), empowers users to verify the name of the account holder before completing a transaction, mitigating risks of wrong credits and potential fraud. The implementation of this verification system across a wider range of payment methods reflects the RBI's commitment to enhancing financial security for both individuals and institutions.
Despite a recent 50 basis point rate cut by the US Federal Reserve, the RBI MPC opted to maintain the repo rate at 6.5 percent during the October policy meeting. While the stance on monetary policy shifted from 'withdrawal of accommodation' to 'neutral,' the decision to hold the repo rate steady signals a cautious approach to managing inflation and economic growth. The RBI's decision to maintain the status quo on the repo rate reflects a careful balancing act between promoting economic activity and ensuring price stability.