RBI introduces game-changing updates that will significantly impact all transactions | Read in Detail
RBI update: The Reserve Bank of India (RBI) has announced four significant updates that are set to impact the way financial transactions are conducted across the country. These updates include the introduction of ‘delegated payments’ on the Unified Payments Interface (UPI), faster cheque clearing through the Cheque Truncation System (CTS), the creation of a public database for verified digital lending apps, and an increase in the UPI transaction limit for tax payments.
Delegated Payments: Authorise others to make UPI payments
One of the most notable updates is the introduction of a new feature called “Delegated Payments” on UPI. This feature will allow the primary user of a bank account to authorise a secondary user, such as a family member, to make UPI payments on their behalf. This development is particularly beneficial for situations where dependents, like children or elderly parents, need to make payments from a family member’s bank account.
For instance, parents can now authorise their children to pay for school or college-related expenses directly from their bank account, without the need for the primary account holder to be present for every transaction. This feature is expected to streamline family finances and make it easier for dependents to manage their expenses.
Faster Cheque Clearing with Updated CTS
Another significant update is related to the Cheque Truncation System (CTS), which is used by banks to clear cheques electronically. Currently, CTS can take up to two days to process a cheque. However, with the new updates, the RBI has proposed that cheques be cleared within a few hours, drastically reducing the waiting time for cheque payments to be processed.
Public Database for Verified Digital Lending Apps
In response to the growing concerns about unethical digital lending apps, the RBI has announced plans to create a public database of verified digital lending apps (DLAs). These apps, which often claim to be regulated by the RBI, have been known to engage in practices that raise data privacy issues, charge exorbitant interest rates, and use unfair methods to recover loans.
The new public repository will list DLAs associated with entities regulated by the RBI, allowing consumers to easily verify whether a lending app is legitimate. This initiative aims to protect consumers from falling victim to fraudulent or unethical lending practices and to promote transparency in the digital lending space.
Increase in UPI Transaction Limit for Tax Payments
The UPI platform, known for its ease of use, has seen a significant rise in popularity for payments. Recognising this, the RBI has decided to increase the transaction limit for tax payments made through UPI from Rs 1 lakh to Rs 5 lakh per transaction. This move is expected to encourage more taxpayers to use UPI for their tax payments, providing a more convenient and efficient way to settle their tax obligations.