The Securities Exchange Board of India (SEBI) has suggested raising the daily transaction limit for capital market transactions from Rs2 lakh to Rs5 lakh, according to a consultation paper released on January 31, 2025. This proposed increase aims to enhance the efficiency of UPI-based transfers in capital markets.

 

The regulatory body's decision is backed by comprehensive transaction analysis from top brokers' client data. The study revealed that the vast majority of transactions (92.9%) are below Rs1 lakh, while transactions between Rs1-2 lakh and Rs2-3 lakh account for 3.9% and 1.3% respectively. When considering total daily transactions per investor, similar patterns emerged with 91.5% below Rs1 lakh, 4.6% between Rs1-2 lakh, and 1.6% between Rs2-3 lakh.

 

SEBI emphasizes that implementing this higher limit should not incur significant costs, as the infrastructure involves four key stakeholders: NPCI, banks, registered intermediaries, and SEBI itself. The National Payments Corporation of India (NPCI) has confirmed its readiness to accommodate such changes, noting that issuing new UPI handles is an ongoing process within their system design.

 

However, this proposed Rs5 lakh limit remains subject to periodic review in consultation with NPCI. Separately, NPCI has announced that from 1 February 2025, their central system will reject transactions containing special characters, requiring transaction IDs to be strictly alphanumeric.

This initiative represents a significant step toward modernizing India's capital market transaction infrastructure while maintaining system security and efficiency.