• The Unified Payment Interface (UPI), the digital payment system built by the government of India, is now ready to revolutionise the payment system in the Indian stock market.
  • The National Payment Corporation of India (NPCI) in collaboration with brokerage firms and clearing houses has launched the beta phase of ‘UPI for Secondary Market’ from 1 January.
  • UPI for Secondary market is an ASBA (Application Supported by Blocked Amount) like service, where an investor can block their amount used for buying stocks in the secondary market in their bank accounts instead of transferring it to the broker’s account. The amount will only be debited by the Clearing Corporations upon trade confirmation during settlement. Clearing Corporations will directly process payouts to these clients on a T+1 basis.

UPI payments through credit card

  • Earlier, UPI payments could be linked to bank accounts, prepaid wallets, and overdraft facilities. 
  • Last year, UPI facilitated payments through credit cards. Several public sector and private banks have already launched this facility on RuPay credit cards. The functionality can be availed through registering the credit card with third party UPI apps. 
  • Cardholders can enroll their active primary cards on UPI and make payments to merchants (P2M transactions) using their credit cards. This facility is free for customers. 
  • The linking of RuPay credit cards to UPI will ensure that customers will no longer have to carry their credit cards with them at all times for payments
  • Recently, IndusInd Bank became the first bank in the country to integrate UPI functionality with a Corporate Credit Card.

Enhanced UPI transaction limit for specified categories

  • The RBI recently enhanced the UPI transaction limit for payment to hospitals and educational institutions from R1 lakh to R5 lakh per transaction.
  • This, according to the central bank, will help the consumers to make UPI payments of higher amounts for education and healthcare purposes. For normal UPI the transaction limit is up to R1 lakh per transaction.
  •  For few specific categories of transaction in UPI like capital markets, collections, insurance, foreign inward remittances the transaction limit is up to R2 lakh and for Initial Public Offering 
  • and retail direct scheme the limit is up to R5 lakh per transaction 

NRIs can use UPI for domestic transactions

  • NRIs with international numbers can do UPI transactions in India. NRIs through their NRE/NRO accounts can make UPI payments even through their international mobile numbers. This was allowed through a circular in January 2023.  However, such transactions must follow all the FEMA (Foreign Exchange Management Act) and Anti-money laundering regulation.

Leave a Reply

Your email address will not be published. Required fields are marked *