The payments and banking landscape has seen a constant evolution over the last few years. From UPI to BaaS, and everything in between, innovation in fintech has been making a great impact on businesses and consumers alike. 

This innovation has transformed the way financial services are carried out today – which means, an intervention in the form of policies from regulatory bodies is in order. To keep pace with the evolving industry, old policies are reviewed and certain new ones are introduced. 

As a fintech company, we at Cashfree Payments understand what these policies are and how they can directly influence businesses and consumers. And, our aim with this series is to help you make sense of the same. 

So, let’s jump right in!

Budget 2022: 75 Digital Banking Units to be set up

The most awaited event of the year, the Union Budget 2022, made a number of promising announcements for the payments industry.

  • Digital Banking Units (DBU) are to be set up by Scheduled Commercial Banks in 75 districts, pushing BaaS led financial inclusion
  • Post offices across the country are to be integrated with Core Banking System (CBS), enabling easy account access and online fund transfers between post office and bank accounts 

(RELATED READ: RBI and Niti Aayog to regulate digital banks and neobanking services)

New NACH Mandates

There have been multiple steps to push NACH as a device for recurring payments and bulk payouts. And, each one of these steps open up new use cases – like daily NACH (enabling on-time loan collections). 

With the NACH limit enhanced to ₹10 lakh, higher value use cases come to light. And, two new updates have been introduced to increase NACH’s reach and efficiency. 

Authentication on Aadhaar-based NACH 

Creating a mandate for recurring payments via NACH needs compulsory authentication first. Normally, you would do this via debit card or netbanking. While e-sign is another option, it isn’t as widely used as the other two. 

And now, NPCI has introduced Aadhaar number + OTP as an option.

This enables newer segments to access NACH, specifically those who don’t have a debit card or netbanking, but have their Aadhaar.

Aadhaar is also being used in UPI onboarding instead of debit cards alone. 

Increased limit for TReDs

TReds, a platform that facilitates financing and discounting of MSME trade receivables, uses NACH for settlements between financiers, MSME sellers, and corporate buyers. 

The limit for settlements is enhanced from ₹1 crore to ₹3 crore. 

This meets the growing liquidity needs of MSMEs, as well as facilitates the requests received from the TReDs platform.

eRUPI limit hiked to ₹1 lakh

Launched in July 2021, eRUPI is a prepaid voucher disbursed in bulk as a QR code or SMS string. eRUPI allows consumers to utilise one-time use, non-reloadable vouchers, without downloading any app or KYC, even if they don’t have a bank account or a smartphone. 

Currently, this has been hiked only for government sponsors.

Since the previous cap was ₹10,000, use cases were limited to low value transactions. With the announcement of the new upper limit being ₹1 lakh, the possibilities increase. 

Bonus: This change also allows the eRUPI voucher to be used multiple times until complete redemption. 

What more can help us:

  • We know that an eRUPI voucher can now be used multiple times. But, we need clarity on whether the same voucher can be used with one or multiple merchants.
  • To further enable businesses and customers, it would be very beneficial if the changes on the eRUPI voucher can be extended to corporate companies as well.
  • Such a step, along with introducing the promised P2P use cases for all sponsors, will open endless possibilities with eRUPI – corporate gifting, transit, payroll, student cards, forex travel cards, and so much more!

Our worthy mentions

The power of UPI, now in Nepal 

NPCI collaborated with Nepal’s Gateway Payments Service Private Limited and Manam Infotech Private Limited,  to deploy UPI for businesses in Nepal. This is to enable real-time P2P and P2M transactions.

This makes Nepal the first country to have adopted our beloved UPI as a payment mode.

This partnership is expected to catalyse financial inclusion in Nepal, while advancing real-time, cross-border P2P remittances between Nepal and India.

IFSCA Fintech Incentive scheme

This new scheme provides financial assistance to domestic and foriegn fintech players including participants in the IFSCA’s sandboxes, cohorts, accelerators, etc., up to ₹75 lakh. 

The scheme will initially be operational for 3 years, and it aims to establish a world class fintech hub, at par with advanced international financial centres elsewhere.

The grant is issued for various purposes – startup, proof-of-concept, sandbox, ESG, accelerator, and listing support.

NPCI NFinite Marketplace

NPCI launched a marketplace for APIs to enable fintech startups and other API consumers to collaborate, conceptualise, and build API-based financial solutions. It is a developer environment created for corporates, banks, start-ups, technology platforms, developers, and academia of the world. 

The use-cases include banking, payments, KYC, payment collections and payouts, credit scoring, etc. 

What to expect

With major advancements in the payments space, we can foresee the simplification of everyday financial services. While policies apply where regulations become necessary, it is undeniable that the governing bodies are pushing bounds to make things easier for innovators, businesses, as well as consumers. 

We can certainly anticipate newer reforms in the coming years that not only monitor financial services, but also help move these services by leaps and bounds.

This edition has been assisted by Urmil Shah (intern) and edited by Harshitha Rao.


  1. IFSCA Notification: Fintech Incentive Scheme, IFSCA/2021-22/GN/022, February 02, 2022
  2. NPCI Circular: E-mandate scope & limit enhancement, NPCI/2020-21/NACH/Circular No.010, dated July 15, 2020
  3. NPCI Circular: E-mandate through Aadhaar based authentication, NPCI/2021-22/NACH/Circular No. 009, dated February 10, 2022
  4. NPCI Circular: Increasing the mandate limit for TReDS, NPCI/2021-22/NACH/Circular No. 010, dated February 11, 2022
  5. NPCI Press Release: NPCI International, Gateway Payment Service, and Manam Infotech join hands to deploy UPI solution in Nepal, dated February 17, 2022
  6. RBI Notification: Regulations Review Authority (RRA 2.0) – Interim Recommendations – Withdrawal of Circulars, RBI/2021-2022/164, dated February 18, 2022
  7. RBI Occasional Paper: Payment and Settlement Systems Regulations, 2008 as Amended up to 2022, dated February 23, 2022
  8. RBI Press Release: Statement on Developmental and Regulatory Policies, 2021-2022/1694, dated February 10, 2022
  9. RBI Press Release: Regulations Review Authority (RRA 2.0) – Interim Recommendations- Second tranche, 2021-2022/1738, dated February 18, 2022

Head, Fintech Policy at Cashfree.