RBI Raises UPI Transaction Limit to 5 Lakh for All Categories, Enables UPI Credit on Rupay

In a move that further cements UPI's position as India's dominant digital payment infrastructure, the Reserve Bank of India has raised the per-transaction UPI limit from 1 lakh to 5 lakh rupees for all retail payment categories. Additionally, the RBI has enabled credit line access via UPI on the RuPay network, allowing consumers to make UPI payments directly from pre-approved credit lines without needing a separate credit card.

Higher Transaction Limits

The previous 1 lakh per-transaction limit had become a bottleneck for several use cases, including property advance payments, vehicle purchases, hospital bills, and education fee payments. The new 5 lakh limit effectively makes UPI viable for high-value transactions that previously required NEFT, RTGS, or demand drafts. The limit for tax payments via UPI has been separately raised to 5 lakh from the earlier 1 lakh.

Monthly UPI transaction volumes have already crossed 18 billion as of February 2026, with total transaction value exceeding 25 lakh crore per month. The higher limit is expected to shift a significant portion of NEFT transactions (currently about 40 crore per month in the 1-5 lakh range) to UPI, further simplifying the payment experience.

UPI Credit on RuPay

The UPI credit line feature allows banks to extend pre-approved credit limits directly accessible through UPI. Unlike conventional credit cards, this facility requires no separate card issuance, no plastic, and no separate app. Users simply select their credit line as the funding source in their existing UPI app (PhonePe, Google Pay, Paytm, etc.) and transact normally.

Initial rollout is limited to select banks offering credit lines of 50,000 to 2 lakh, with interest rates ranging from 12-18% per annum and flexible repayment options from 3 to 12 months. The RBI has mandated full transparency on interest rates and charges, with costs displayed before every credit transaction.

What This Means for Consumers

For disciplined users, UPI credit provides a convenient short-term borrowing facility integrated into daily payments. For those prone to overspending, however, easy credit access carries risk. The RBI has mandated a mandatory cooling-off period of 24 hours after credit line activation and requires banks to send SMS alerts for every credit transaction, ensuring consumers remain aware of their borrowing.