In this era of Digital India, we all use PhonePe, Google Pay, or Paytm. However, due to the stringent regulations of the National Payments Corporation of India (NPCI) and a lack of proper knowledge of the limits set by banks, payments often get stuck at the last minute.
Most people blame the mobile app or the internet for failed transactions, but the real reason is that they’ve reached their daily transaction limit. In today’s detailed article, we’ll explain in detail how much money you can send in a day and where the government has allowed transactions up to ₹5 lakh, so that your next important payment isn’t blocked.
Why aren’t transactions of more than ₹1 lakh processed in a day
Often, when we try to send a large amount of money to someone and it fails, we assume the bank’s server is down. The reality is that to maintain security and system stability, NPCI has set a maximum daily limit of ₹100,000 (one lakh rupees) for general personal use. This rule applies uniformly to almost all major banks and all popular UPI apps.
This means that whether you send one lakh rupees in one go or make multiple transactions in smaller installments, once your total amount reaches one lakh rupees, your UPI services will be temporarily suspended for that day. This limit primarily applies to both P2P (person-to-person) and P2M (person-to-merchant) transactions.
P2P and P2M Transactions
Money transfer limits aren’t just limited to rupees; many banks also have restrictions on the number of transactions allowed per day. For example, if you have an account with the State Bank of India (SBI), you can make a maximum of 20 P2P transactions per day, meaning you can send money to friends or relatives.
However, there’s generally no such limit on the number of P2M payments you can make to shopkeepers or merchants. This rule is designed to reduce online fraud and spam transactions. Therefore, if your money isn’t transferred despite your amount being less than ₹1 lakh, you’ve likely reached the daily limit.
Special discount up to ₹5 lakh
The ₹1 lakh limit doesn’t apply to every transaction. For essential services that require significant cash flow, NPCI has increased this limit to ₹500,000 (five lakh rupees) for the convenience of the public. If you’re paying a bill at a verified hospital or paying school or college fees, you can make a single transaction of up to ₹5 lakh.
The same higher limit applies to tax payments, IPO applications, and significant investments like the RBI Retail Direct Scheme. This special exemption is designed to ensure that people don’t have to rely on older, slower methods like net banking or checks to make large and important payments.
PIN-free rules for small expenses
UPI Lite has emerged as a great option to avoid the hassle of repeatedly entering a PIN for tea, snacks, or small groceries. However, it also has some limitations that are important to understand. You can only make a maximum of ₹1,000 at a time using UPI Lite.
For security reasons, you can add a maximum of ₹4,000 to this wallet per day, and the total balance in your wallet should not exceed ₹5,000 at any given time. This feature is ideal for those who make many small transactions throughout the day and don’t want every small payment to appear on their bank statement.