Most of the Indian digital wallet users are opposed to any decrease in wallet limit on transactions and balance proposed by the Reserve Bank of India (RBI), according to a new survey by LocalCircles. The findings coincide with the central bank's analysis of the stakeholders' comments on a draft Master Direction on Prepaid Payment Instruments (PPIs), 2026, which seeks to revamp the existing framework put in place in 2021.
Key Highlights
- 63% of digital wallet users want RBI to retain or increase wallet limits.
- Most users fear lower wallet limits will disrupt everyday digital payment transactions.
In recent years, India's digital payments sector has surged in growth, fueled by the popularity of UPI, digital wallets, and prepaid payment instruments. Digital wallets have become a necessary tool for the payment of millions of people in the country, from paying utility bills, shopping online to going to the grocery store to commuting to work everyday.
RBI's Proposed Changes to Digital Wallet Rules
The RBI has proposed to enhance the outstanding limit of Full-KYC wallets from current limits to Rs 2 lakh as per the draft guidelines announced in April. But the proposal also aims to drastically cut the monthly cash top-up amount from Rs 50,000 to Rs 10,000.
The draft framework additionally proposes:
- A uniform Rs 25,000 monthly cap on person-to-person transfers
- Mandatory interoperability across UPI and card networks
- Immediate refunds for failed transactions
- Stricter compliance norms to curb fraud and strengthen anti-money laundering measures
Majority of Users Oppose Lower Wallet Limits
To understand public sentiment, LocalCircles surveyed over 43,000 digital wallet users across 304 districts in India.
The survey revealed that 63% of respondents want the RBI to either retain existing wallet limits or increase them. Among them:
- 33% favored increasing wallet limits to match growing digital payment usage.
- 30% believed current limits are sufficient and should remain unchanged.
- 23% suggested limits should vary based on KYC levels and user authentication standards.
- Only 7% supported lowering limits to reduce fraud risks.
- Another 7% remained undecided.
The findings indicate that consumers increasingly view digital wallets as a core component of everyday financial transactions rather than a high-risk payment instrument requiring tighter restrictions.
Users Fear Disruption to Daily Transactions
The survey also highlighted concerns about the practical impact of lower wallet limits.
Around 62% of respondents said reduced wallet limits would create inconvenience, given their frequent use of digital wallets for daily spending. Meanwhile:
- 26% said they would shift higher-value transactions to bank accounts or UPI.
- 17% indicated they might return to cash for certain payments.
- 19% feared losing access to wallet-linked rewards and promotional benefits.
- Another 19% believed lower balances could help reduce fraud exposure.
Notably, 38% of users stated that reducing wallet limits would do little to prevent fraud and would primarily inconvenience genuine customers.
Also Read: UPI Sets New Record with 23 Billion Transactions in May
Industry Consultation Underway
The survey findings are expected to form part of the broader consultation process as the RBI evaluates feedback on the proposed PPI framework. While consumers broadly support stronger security measures, faster refunds, and greater interoperability, the survey suggests many prefer a more flexible approach to wallet limits, potentially linked to enhanced KYC and authentication requirements rather than blanket restrictions.
With digital payment adoption continuing to expand across metros, smaller cities, and rural India, the RBI's final decision on wallet limits could significantly influence the future growth trajectory of the country's digital payments ecosystem.
