From UPI transaction limit to gold loans: Six measures announced by RBI for banks, fintechs

The Reserve Bank of India (RBI) on Wednesday introduced six new regulatory proposals for banks and fintechs, alongside a 25 basis points (bps) cut in the repo rate, reducing it to 6%. The announcements were made by RBI Governor Sanjay Malhotra after the conclusion of the Monetary Policy Committee’s three-day meeting.

The measures include four proposals for banks and two for fintech companies. RBI will release the draft guidelines for all six today and seek public feedback.

Key measures announced by the RBI

1. Securitisation of stressed assets framework:
RBI proposed a new framework to allow securitisation of stressed assets through a market-driven mechanism, in addition to the existing Asset Reconstruction Company (ARC) route under the SARFAESI Act. The objective is to improve risk distribution and offer lenders an exit route. The proposal builds on a discussion paper issued in January 2023 and incorporates stakeholder suggestions.


2. Expanded co-lending guidelines:
Existing co-lending rules apply only to collaborations between banks and NBFCs for priority sector lending. RBI plans to broaden this to cover all regulated entities (REs) and all loan categories. The draft framework aims to address evolving credit partnerships across the sector.

3. Uniform regulations for gold-backed loans:
RBI will introduce standardised guidelines for loans backed by gold jewellery and ornaments across all REs. The move is aimed at harmonising conduct and prudential norms and responding to observed risks in the segment.

4. Revised guidelines for non-fund based facilities:
New norms will consolidate rules for non-fund based facilities like guarantees, letters of credit, and co-acceptances. The review includes updates on partial credit enhancement to boost infrastructure financing.

Key measures for fintechs

5. UPI Transaction limits to be made flexible:
Currently, UPI transactions are capped at ₹1 lakh for most use cases. RBI has proposed that the National Payments Corporation of India (NPCI) will now have the authority to revise transaction limits in consultation with stakeholders. Banks will retain the discretion to set their internal limits within the NPCI cap. The ₹1 lakh limit on peer-to-peer (P2P) transfers will remain unchanged.

6. On Tap’ and ‘Theme Neutral’ regulatory sandbox:
RBI plans to shift the Regulatory Sandbox to an open-ended, theme-neutral format. Earlier, sandboxes were cohort-based with specific themes and timelines. Under the new system, eligible fintech innovations will be allowed to apply and test their products at any time. Further details will be shared separately.