rbi-proposes-digital-lending-repository-and-upi-updates

**RBI Proposes Digital Lending Repository and UPI Updates**

RBI plans digital lending app repository; Tax UPI limit raised to Rs 5 lakh

The RBI proposed creating a public repository of digital lending apps to combat unauthorized players and introduced 'Delegated Payments' in UPI, allowing users to delegate UPI transactions. They also increased the UPI tax payment limit to Rs 5 lakh and plan to speed up cheque clearing by moving to continuous clearing, reducing the cycle to hours.

The Reserve Bank of India (RBI) has announced plans to create a public repository of digital lending apps (DLAs) to tackle issues stemming from the proliferation of unauthorised players in the sector. 

The proposal, outlined by RBI Governor Shaktikanta Das on Thursday, aims to address the challenges consumers face when dealing with unregulated lending platforms.

Under the new proposal, regulated entities (REs) will be required to report and update details about their DLAs in the repository. This initiative is expected to help consumers distinguish between authorised and unauthorised lending applications.

In a significant development for digital transactions, the RBI also proposed the introduction of 'Delegated Payments' in the Unified Payments Interface (UPI). This facility will allow a primary user to authorise another individual, known as a secondary user, to conduct UPI transactions from their bank account without requiring the secondary user to have a separate bank account linked to UPI. 

The RBI believes this move will further enhance the reach and usage of digital payments.

Additionally, the RBI has announced an increase in the transaction limit for tax payments via UPI, raising it from ₹1 lakh to ₹5 lakh per transaction. This change is aimed at simplifying the process of tax payments for consumers.

The central bank also revealed plans to expedite cheque processing. Currently, cheque clearing through the Cheque Truncation System (CTS) operates on a batch-processing basis, with a clearing cycle of up to two working days.

 The RBI proposes to introduce continuous clearing with 'on-realisation-settlement' in CTS, which will allow cheques to be cleared within a few hours on the day of presentation.

These measures are part of the RBI's broader efforts to foster the orderly development of the digital lending ecosystem and improve the efficiency of financial transactions in India.