Taxmann's Analysis | RBI's Key Regulatory Reforms – Beneficiary Name Look-up Feature | UPI Limits

Page 1


RBI Unveils

Key Regulatory Reforms

Beneficiary Name Look-up for RTGS/NEFT

Hikes UPI Transaction

Limits

RBI Unveils

Key Regulatory Reforms

Beneficiary Name Look-up for RTGS/NEFT

Hikes UPI

Transaction

Limits

1. Introduction

The Reserve Bank of India (RBI) vide. Press Release No. 2024-2025/1254, dated October 9, 2024, unveiled a series of significant development and regulatory policies aimed at enhancing financial stability and promoting sustainability in the financial ecosystem. These initiatives cover key areas such as regulatory reforms and payment systems, with a focus on encouraging innovation, improving transparency and safeguarding customer interests. The key proposals outlined in the Statement on Developmental and Regulatory Policies are discussed in detail hereunder:

2.

Beneficiary Name Look-up Feature for

RTGS/NEFT Transfers

Payment Systems like Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) allow the remitter to verify the name of the receiver (beneficiary) before initiating a payment transaction. Requests have been made to introduce such a facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems.

Accordingly, the RBI has proposed introducing a beneficiary account name look-up facility to enable remitters in RTGS and NEFT to verify the name of the beneficiary account holder before initiating funds transfer. Remitters can input the account number and the branch IFSC code of the beneficiary, following which the beneficiary’s name will be displayed. This facility will increase customer confidence by reducing the possibility of wrong credits and fraud.

3. Enhancement of UPI123 Pay Transaction Limit to Rs 10,000 and UPI Lite Wallet Limit to Rs 5,000

In order to encourage wider adoption of UPI, the RBI has decided to enhance the limits for the following UPI products –

(a) UPI123 Pay – UPI123 was launched in March 2022, with a view to enable feature-phone users to use UPI. This facility is currently available in 12 languages. At present, the per-transaction limit for UPI123 Pay is capped at Rs 5,000. To widen the use cases, after consultation with the stakeholders, the RBI has decided to increase the per transaction limit to Rs 10,000.

(b) UPI Lite – Currently, a limit of Rs 500 per transaction and an overall limit of Rs 2,000 per UPI Lite wallet are in place, along with the auto-replenishment facility. To expand the scope of usage of this product, the RBI has now decided to raise the UPI Lite wallet limit to Rs 5,000 and the per-transaction limit to Rs 1,000.

4.

Extension of

‘Foreclosure Charge Guidelines’

to Micro and Small Enterprises

As per the extant guidelines, banks and NBFCs are not permitted to levy foreclosure charges/pre-payment penalties on any floating rate term loan sanctioned to individual borrowers, with or without co-obligants, for purposes other than business.

To further safeguard customers’ interests by promoting better transparency and customer centricity among lenders, the RBI has decided to extend the scope of these regulations to cover loans to Micro and Small Enterprises (MSEs) provided by the Regulated Entities of the Reserve Bank.

5. ‘Capital Raising Avenues for Primary (Urban) Co-operative Banks

The initial set of guidelines on the issuance and regulation of share capital and securities for Primary (Urban) Co-operative Banks (UCBs), aimed at ensuring alignment with the Banking Regulation (Amendment) Act 2020, was issued in 2022. However, these guidelines did not cover the newly enabled capital-related provisions, such as the issuance of special shares, shares at a premium, etc., which are new to the co-operative banking sector.

The Report of the Expert Committee on Primary (Urban) Co-operative Banks, chaired by Shri. N.S. Vishwanathan, former Deputy Governor, RBI, had provided broad guiding principles through its recommendations on these provisions.

To further operationalise these recommendations, a Working Group was constituted within the RBI to address the newly enabled capital-related provisions. Based on the recommendations of the Working Group, a Discussion Paper on Capital Raising Avenues for Primary (Urban) Co-operative Banks will be issued to solicit feedback and suggestions from stakeholders.

6.

Creation of Data Repository, ‘Reserve Bank

Climate

Risk Information System’

Climate change is emerging as one of the significant risks to the financial system. Regulated entities must undertake climate risk assessments to ensure the stability of their balance sheets and the financial system. These assessments require highquality data relating to local climate scenarios, climate forecasts, and emissions.

However, the available climate-related data is characterised by various gaps, such as fragmented and varied sources and differing formats, frequencies, and units. To address these gaps, the RBI has proposed creating a data repository, namely, the Reserve Bank—Climate Risk Information System (RB-CRIS), comprising of two parts.

The first part will be a web-based directory listing various data sources (meteorological, geospatial, etc.), and will be publicly accessible on the RBI website. The second part will be a data portal comprising datasets (processed data in standardised formats). Further, access to this data portal will be made available only to the regulated entities in a phased manner.

7. Conclusion

In conclusion, the RBI’s recent regulatory and development initiatives aim to enhance financial stability, transparency and inclusivity in India’s financial ecosystem. The introduction of the beneficiary account name look-up feature will improve users’ safety and confidence by reducing errors and potential fraud. Similarly, increasing UPI123 Pay and UPI Lite transaction limits will encourage broader UPI adoption, particularly for feature phone users, thereby promoting financial inclusion.

The extension of foreclosure charge guidelines to MSMEs highlights the commitment to customer-centric banking and fair lending practices. Further, the creation of the Reserve Bank Climate Risk Information System reflects the RBI’s forward-looking approach to addressing the growing risks posed by climate change. Overall, these initiatives reflect the RBI’s ongoing efforts to strengthen regulations, encourage innovation and address new challenges, with the goal of maintaining a strong and stable financial system.

About Us

Founded 1972

Evolution

Expansion

From a small family business to a leading technology-oriented Publishing/Product company

Launch of Taxmann Advisory for personalized consulting solutions

Our Vision

Aim

Achieve perfection, skill, and accuracy in all endeavour

Growth

Evolution into a company with strong independent divisions: Research & Editorial, Production, Sales & Marketing, and Technology

Future

Continuously providing practical solutions through Taxmann Advisory

Our Strength

Core

Editorial and Research Division

Team

Over 200 motivated legal professionals (Lawyers, Chartered Accountants, Company Secretaries)

Expertise

Monitoring and processing developments in judicial, administrative, and legislative fields with unparalleled skill and accuracy

Impact

Helping businesses navigate complex tax and regulatory requirements with ease

Taxmann Today

Legacy Innovation Commitment

Over 60 years of domain knowledge and trust

Technology-driven solutions for modern challenges

Ensuring perfection, skill, and accuracy in every solution provided

Our Core Domain Areas

Income Tax

Corporate Tax Advisory

Trusts & NGO Consultancy

TDS Advisory

Global Mobility Services

Personal Taxation

Training Due Diligence

Foreign Exchange Management Laws

Due Dilligence

Advisory Services

Assistance in compounding of offences

Transactions Services

Investment outside India

Your Partners for Frictionless Advice

Goods

Transaction Advisory

Business Restructuring

Classification & Rate Advisory

Due Diligence

Training

Trade Facilitation Measures

Corporate

Corporate Structuring

VAT Advisory

Residential Status

A Glimpse of the People Behind Taxmann

Naveen Wadhwa

Research and Advisory [Corporate and Personal Tax]

Chartered Accountant (All India 24th Rank)

14+ years of experience in Income tax and International Tax

Expertise across real estate, technology, publication, education, hospitality, and manufacturing sectors

Contributor to renowned media outlets on tax issues

Vinod K. Singhania Expert on Panel | Research and Advisory (Direct Tax)

Over 35 years of experience in tax laws

PhD in Corporate Economics and Legislation

Author and resource person in 800+ seminars

V.S. Datey Expert on Panel | Research and Advisory [Indirect Tax]

Holds 30+ years of experience

Engaged in consulting and training professionals on Indirect Taxation

A regular speaker at various industry forums, associations and industry workshops

Author of various books on Indirect Taxation used by professionals and Department officials

Manoj Fogla Expert on Panel | Research and Advisory [Charitable Trusts and NGOs]

Over three decades of practising experience on tax, legal and regulatory aspects of NPOs and Charitable Institutions

Law practitioner, a fellow member of the Institute of Chartered Accountants of India and also holds a Master's degree in Philosophy

PhD from Utkal University, Doctoral Research on Social Accountability Standards for NPOs

Author of several best-selling books for professionals, including the recent one titled 'Trust and NGO's Ready Reckoner' by Taxmann

Drafted publications for The Institute of Chartered Accountants of India, New Delhi, such as FAQs on GST for NPOs & FAQs on FCRA for NPOs.

Has been a faculty and resource person at various national and international forums

the UAE

Chartered Accountant (All India 36th Rank)

Has previously worked with the KPMG

S.S. Gupta Expert on Panel | Research and Advisory [Indirect Tax]

Chartered Accountant and Cost & Works Accountant

34+ Years of Experience in Indirect Taxation

Bestowed with numerous prestigious scholarships and prizes

Author of the book GST – How to Meet Your Obligations', which is widely referred to by Trade and Industry

Sudha G. Bhushan Expert on Panel | Research and Advisory [FEMA]

20+ Years of experience

Advisor to many Banks and MNCs

Experience in FDI and FEMA Advisory

Authored more than seven best-selling books

Provides training on FEMA to professionals

Experience in many sectors, including banking, fertilisers, and chemical

Has previously worked with Deloitte

Contact Us

Taxmann Delhi

59/32, New Rohtak Road

New Delhi – 110005 | India

Phone | 011 45562222

Email | sales@taxmann.com

Taxmann Mumbai

35, Bodke Building, Ground Floor, M.G. Road, Mulund (West), Opp. Mulund Railway Station Mumbai – 400080 | Maharashtra | India

Phone | +91 93222 47686

Email | sales.mumbai@taxmann.com

Taxmann Pune

Office No. 14, First Floor, Prestige Point, 283 Shukrwar Peth, Bajirao Road, Opp. Chinchechi Talim, Pune – 411002 | Maharashtra | India

Phone | +91 98224 11811

Email | sales.pune@taxmann.com

Taxmann Ahmedabad

7, Abhinav Arcade, Ground Floor, Pritam Nagar Paldi

Ahmedabad – 380007 | Gujarat | India

Phone: +91 99099 84900

Email: sales.ahmedabad@taxmann.com

Taxmann Hyderabad

4-1-369 Indralok Commercial Complex Shop No. 15/1 – Ground Floor, Reddy Hostel Lane Abids Hyderabad – 500001 | Telangana | India

Phone | +91 93910 41461

Email | sales.hyderabad@taxmann.com

Taxmann Chennai No. 26, 2, Rajan St, Rama Kamath Puram, T. Nagar

Chennai – 600017 | Tamil Nadu | India

Phone | +91 89390 09948

Email | sales.chennai@taxmann.com

www.taxmann.com

Taxmann Bengaluru

12/1, Nirmal Nivas, Ground Floor, 4th Cross, Gandhi Nagar

Bengaluru – 560009 | Karnataka | India

Phone | +91 99869 50066

Email | sales.bengaluru@taxmann.com

Taxmann Kolkata Nigam Centre, 155-Lenin Sarani, Wellington, 2nd Floor, Room No. 213

Kolkata – 700013 | West Bengal | India

Phone | +91 98300 71313

Email | sales.kolkata@taxmann.com

Taxmann Lucknow

House No. LIG – 4/40, Sector – H, Jankipuram Lucknow – 226021 | Uttar Pradesh | India

Phone | +91 97924 23987

Email | sales.lucknow@taxmann.com

Taxmann Bhubaneswar

Plot No. 591, Nayapalli, Near Damayanti Apartments

Bhubaneswar – 751012 | Odisha | India

Phone | +91 99370 71353

Email | sales.bhubaneswar@taxmann.com

Taxmann Guwahati

House No. 2, Samnaay Path, Sawauchi Dakshin Gaon Road

Guwahati – 781040 | Assam | India

Phone | +91 70866 24504

Email | sales.guwahati@taxmann.com

Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.