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Digital transactions, especially through Unified Payment Interface (UPI), is likely to get a further boost in the coming months, with the country’s largest public sector lender State Bank of India (SBI) deciding to halve the daily cash withdrawal limit to ₹20,000 per day from October 31.
Experts feel that the decision by SBI, which has over 42 crore customers, will lead to an almost 50 per cent jump in UPI transactions.
“We expect over 50 per cent jump in UPI transactions and also IMPS. People are more likely to use UPI for big-ticket transactions, too, due to the curb on withdrawal limits. Other banks are also likely to follow suit in the coming days,” said a top official engaged with payment-related activities.
National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, which was created under the provisions of the Payment and Settlement Systems Act, 2007, launched the UPI last year and, so far, over 151 banks and other financial institutions in the country have gone live with it. It did not comment on the subject. SBI, in a statement, said that the curb on withdrawal limits was to check frauds and also boost digital transactions, which have seen a rise after the introduction of demonetisation in 2016 and the launch of UPI last year. Monthly transactions through UPI increased by over 30 per cent month-on-month to 40.58 crore in volumes in September at ₹59,835 crore, as per recent data shared by the NPCI.
In August, about 31.20 crore UPI transactions were recorded at ₹54,212.26 crore. Government-backed BHIM UPI registered 1.63 crore transactions worth ₹7,064.86 crore in September, compared to 1.65 crore transactions (totalling ₹6,872.57 crore) in the previous month.
The rest came from banks and other PPIs, including mobile wallets.
Alibaba-backed Paytm, a leading mobile wallet player in the country, has registered over 13.7 crore UPI transactions in September, contributing over 33 per cent of the overall transactions, the company claims, while Flipkart’s PhonePe has not shared its September numbers.
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