SEBI’s Major Decision on UPI Investments
Investors using UPI for capital market transactions may soon benefit from an increased transaction limit. The Securities and Exchange Board of India (SEBI) has proposed raising the UPI transaction limit from ₹2 lakh to ₹5 lakh to streamline the investment process.
SEBI’s Proposal and Rationale
SEBI believes that increasing the limit will enhance the ease of transactions for investors while ensuring a secure and efficient digital payment experience. However, this change is currently part of a consultation paper and will be further assessed in collaboration with the National Payments Corporation of India (NPCI) before implementation.
Transaction Study and Findings
Before making this proposal, SEBI conducted a study on transactions made by clients of top brokerage firms. The findings were as follows:
- 92.9% of transactions were below ₹1 lakh
- 3.9% were between ₹1 lakh and ₹2 lakh
- 1.3% fell between ₹2 lakh and ₹3 lakh
Based on this data, SEBI recommended an increased limit of ₹5 lakh to accommodate higher-value transactions seamlessly.
Implementation and NPCI’s Role
SEBI’s consultation paper highlighted that NPCI regularly updates its UPI infrastructure, making it adaptable to new changes. The transition to a higher transaction limit is expected to be implemented smoothly.
Additionally, NPCI issued a circular on January 9, 2025, mandating that from February 1, 2025, all transaction IDs should not contain special characters to enhance processing efficiency.
If approved, this decision will significantly benefit investors by allowing larger investments through UPI in the capital markets.
