New UPI Rules: Key Updates for Loan Borrowers & EMI Payers

Digitalisation has influenced all aspects of our lives, bringing about a radical change in how we work, communicate, do business and spend money on necessities or entertainment. Gone are the days when one went to Banks to physically deposit funds or draw cash for purchases. Banking systems have now revolutionised with online transfers and payments. Customers can withdraw money from ATMs, pay with credit cards, and transfer funds online with a click. With a mobile phone as a constant companion, the introduction of payment Apps has now added a new dimension to swift and simplified payment systems. These Apps work using the UPI, or Unified Payment Interface.

What is the UPI?

The UPI (Unified Payment Interface) is a system that allows users to make safe, inclusive and interoperable payments instantly from their Bank accounts using a smartphone. It will enable users to link multiple Bank accounts to a mobile App for making payments.

Payments are made by Apps using the UPI ID through a VPA (Virtual Payment Address), which allows instant transfer of funds between two bank accounts and payments to merchants. Popular payment Apps used in India include Paytm, Google Pay, PhonePe and the BHIM App.

How does the UPI payment system work?

Download a payment App and enter your account details to link your Bank account. To make and receive payments via an App, create a UPI ID or VPA. (Virtual Payment Address). Your UPI ID is common across all Bank accounts and saves you the hassle of disclosing Bank account numbers. You can transfer funds, make payments to other accounts, and use your UPI ID at merchant outlets. The UPI payments system is safe and secure, with two-way authentication; all transactions are to be confirmed using a UPI PIN.

What are the New UPI rules?

Beginning August 1st, the NPCI (National Payments Corporation of India) has introduced regulatory changes to enhance the UPI system’s dependability, seamlessness, and prevent disruptions.

Checking the Balance of your account: With the rise in digital transactions, individuals feel the need to keep a check on the balance of their Bank accounts. With the facility readily available, constant checks have become a habit. With the increase in the usage of the UPI, to avoid burdening the system, the NCPI has allowed a maximum of 50 checks in a 24-hour roll-out.

Time slots assigned for UPI transfers: Are you paying your telephone or electricity bills through the UPI? It has become a convenient option to pay your bills instantly through a single UPI platform, which provides multiple services. To avoid congestion, the NCPA has ruled that it will now be done as per the time slot allotted for transfers, which could happen during off-peak hours or at night when the system is not clogged.

Limit access to Bank accounts linked with the UPI: The easiest and fastest route to access your Bank account is through the API (Application programming interface) that enables you to view your Bank account through UPI by using the App. According to the new API guidelines, the assigned limit is 25 requests per day per App. In case the account fails to load, a retry is only to be done at the customer’s request.

Limit for autopay mandates: Have you initiated an autopay extension for a credit card, mobile bill, or personal loan EMI? NPCI has set a limit for one attempt with three retries to execute a single mandate. Further, the autopay mandate will only be executed during the non-banking hours, to avoid server overloads and potential outages to the system.

What are the benefits of the new UPI payment rules?

Taking into account the extensive usage, the NPCA has advised the UPI payment service providers to make the relevant changes by July 31st. The changes will increase efficiency and help in the following ways:

To reduce the system overload, prevent delays and outages.
Accommodate for the increasing usage of UPI.
Help increase transparency and safety of transactions.

Precautions to take when making UPI payments.

Whether you are using Paytm, Google Pay, or the BHIM App, the UPI payment functions for all the apps are similar. For optimum use of the UPI payments, note the following:

To keep your account secure, maintain privacy while using your App, and do not share your UPI pin. Avoid entering multiple Bank accounts to avoid unnecessary exposure.
Check the mobile number or the UPI ID you are making the payment to, as the speed of transfers may make it difficult to retrieve a wrong payment.
Wait for the confirmation message before reinitiating a payment, and also check messages for successful payments.
Make limited transactions during peak hours and avoid unnecessary checks for account balances. Set up auto payments in advance to prevent transactional delays.
With the new UPI payment rules coming into play, avoid using the App during peak hours 10:00 to 13:00 and 17:00 to 21:30
Conduct business as usual without constantly checking that your UPI payment is successful; the UPI is working in the background to complete your payment.

The payment Apps are no longer just facilitating UPI payments but are complete platforms offering a variety of services. They provide links for Travel bookings, offer personal loans on behalf of Banks, and even a free CIBIL score check. They also entice usage by offering bonus points and cash back offers. Therefore, with the backbone of the UPI transactions network, we aim to become a one-stop shop easily accessible at all times through your mobile phone.

FAQ :

When was the UPI payment system conceptualised?

In the year 2012, the RBI conceptualised the vision of a cashless payment system that would be simple, secure and easily accessible. NPCI was entrusted with the task of developing the now UPI system, which is recognised as a leading financial innovation produced in India.

How to install my UPI ID on a payment App?

- Download a payment App, such as Paytm, Google Pay, or PhonePe.
- Register your phone number on the App with an OTP. Your phone number must be linked to your Bank account.
- Choose your Bank from the options provided and fill in the details required, such as the account number and IFSC code, to link your account.
- You will be prompted to generate your own unique UPI ID using your name and bank account.
- Set your UPI PIN to authorize transactions.

What payments can I make through my payment App?

The app on your phone is like a virtual debit card; the instant payment transfer has made its usage widespread and convenient. UPI payments through your App can be done for various spends:

To make payments for merchant outlets and online transactions.
Pay your utility bills, such as electricity bills, phone bills, rent, and credit card bills.
Transfer funds to other accounts and within your accounts.
For travel, payment of Airline tickets, hotel stays, and restaurant bills.

How does the UPI payment using mobile numbers work?

According to our bank's current system, there is a mobile number linked to our Bank account. This is the number on which we receive an OTP to complete our online transaction. When we select a mobile number to make a UPI payment, the funds will be transferred to the account of the person associated with that mobile number.

Can we make a UPI payment using an ICICI Bank Rupay Credit Card?

The ICICI Bank Rupay credit card and the HDFC one card are enabled for UPI transactions. Cardholders can make payments through the UPI interface using the Rupay credit card. The amount spent will reflect on the monthly credit card statement and is to be repaid by the due date.

If I forget my UPI PIN, how can I generate a new one?

If you forget your UPI PIN or enter the wrong PIN, your current PIN will be blocked. A new UPI PIN can be generated using the forgot PIN option. You will be required to fill in your debit card number or Bank account details. An OTP will be sent to your mobile number, after which you can generate a new UPI PIN.

Is there a limit to the transaction amount using a UPI App?

There is a CAP for a first-time UPI transfer using a mobile number, depending on the App being used, an amount of ₹ 2000/- to ₹5000/- is allowed as a first transfer.

Can I put a stop payment once I initiate it on my App?

Once initiated, the payment made through UPI is credited instantly, and you cannot retrieve the amount. You will have to contact the customer care of the Bank account for further remedies.

Can I pay the EMI for my HDFC Bank personal loan through my mobile APP?

The EMI for your personal loan is presented to your Bank account for clearing on a pre-determined date. In case your account does not hold the requisite amount to clear the EMI, you can make an instant transfer from another account to honour the EMI and avoid penal charges.