UPI (Unified Payments Interface), developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI), has become the most widely used payment system in India. To use UPI, every user needs a UPI ID—a virtual payment address linked to their bank account.
But who is eligible to create a UPI ID? What are the requirements and restrictions? And can minors or NRIs use UPI? Let’s break it down clearly.
Who Can Create a UPI ID?
1. Resident Indians
- Any Indian resident with a bank account in a UPI-enabled bank can create a UPI ID.
- The mobile number linked to the bank account must be active, as OTP verification is required.
In simple terms: If you have an Indian bank account and the same mobile number registered with your bank, you can create a UPI ID.
2. NRIs with NRE/NRO Accounts
NPCI has extended UPI services to Non-Resident Indians (NRIs) who hold NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts (NPCI, UPI Global Guidelines):
- NRIs can register for UPI using their international mobile numbers if their bank supports it.
- The UPI app (such as Paytm) must also allow international number onboarding.
- Transactions are settled in INR from the linked NRE/NRO account, in line with RBI and FEMA regulations.
Note: The facility depends on your bank’s approval. Some banks may restrict UPI access for certain categories of NRO accounts. Always confirm with your bank first.
3. Minors (Special Case)
Key RBI Guidelines
According to the RBI’s 2025 circular (RBI/2025-26/26 dated April 21, 2025):
- Minors of any age can open savings or term deposit accounts if done through a natural or legal guardian
- Minors aged 10 years or older may also be allowed by banks to open and operate accounts independently, subject to bank-specific policies on age, transaction limits, and required documentation
- Upon reaching adulthood, the bank must obtain fresh operating instructions and the new signature of the individual, plus confirmation of the account balance if previously operated by a guardian
- Banks may offer additional services—like internet banking, ATM/debit cards, cheque books—based on their risk management policies, but accounts must never be allowed to go into overdraft and must always maintain a credit balance. Source: RBI and PDICAI
UPI ID Requirements
To create and use a UPI ID, you must meet a few basic conditions. These are set by NPCI (which developed UPI) and supervised by the RBI.
A UPI-enabled Bank Account
- You must have a savings or current account with a bank that supports UPI.
- Not all banks offer UPI, though most major banks do. NPCI publishes a list of live UPI-enabled banks.
Why needed: A UPI ID is linked directly to your bank account—it’s like giving your account a digital nickname. If your bank doesn’t support UPI, you won’t be able to create a UPI ID.
A Mobile Number Registered with the Bank
- The SIM card in your phone must be the same number registered with your bank account.
- During UPI registration, the app sends an SMS from your phone to verify ownership of both your number and your bank account.
Why needed: This is part of two-factor authentication. It ensures no one else can create a UPI ID for your bank account without having your phone.
Note: If you change your phone number, you must update it with your bank first, otherwise UPI setup will fail.
Completed KYC (Know Your Customer)
- Your bank account must be KYC compliant. This means you’ve provided valid ID proof such as Aadhaar, PAN, Passport, or Voter ID.
- Without KYC, banks may restrict digital services, including UPI.
Why needed: RBI requires all digital payment accounts to be linked to verified identities. This prevents fraud and misuse of UPI.
A Debit Card Linked to Your Bank Account
- When setting up UPI, most apps ask for your debit card details (last 6 digits and expiry date).
- These details are used to help you create a UPI PIN.
Why needed: Your debit card is proof that you are an authorized customer of the bank. It’s a security step to prevent unauthorized users from creating a PIN.
Note: If you don’t have a debit card, some banks may allow alternative methods for UPI PIN setup, but this depends on bank policy.
Simple explanation: Your UPI ID works like an email for money transfers—but only if your phone, bank account, and ID verification are correctly connected.
UPI ID Limitations and Restrictions
Even though UPI is designed to be simple and universal, there are rules and restrictions set by RBI and NPCI to ensure security, smooth functioning, and fraud prevention. Here’s what you need to know:
Per-Transaction Value Caps
- Standard (most transactions): ₹1,00,000 per transaction. NPCI
- Specific categories @ ₹2,00,000: Capital Markets, Collections, Insurance, Foreign Inward Remittances.
- Special categories @ ₹5,00,000:
- IPO (ASBA) & RBI Retail Direct Scheme (G-secs): ₹5,00,000 per txn., Applies to Verified Merchants; identified via purpose codes/MCC in the circular. NPCI
- Hospitals & Educational Services (Verified Merchants): ₹5,00,000 per txn (Dec 2023). NPCI
- Tax Payments (Verified Merchants): ₹5,00,000 per txn (Aug 24, 2024 addendum; continued via later addendum). NPCI
Recurring Payments (UPI Autopay) Limits
- Default e-mandate cap: up to ₹15,000 per debit without additional factor of authentication (AFA). Source: NPCI
- Higher cap for select categories: up to ₹1,00,000 for specified MCCs (e.g., insurance, mutual funds/financial services, etc.) as notified by NPCI. Source: NPCI
Why this matters: small subscriptions/bills can run automatically, while larger recurring payments in permitted categories can go up to ₹1,00,000 under NPCI’s AutoPay framework.
VPA/Account Linkage Behaviour
- A single UPI handle (VPA) can be linked to multiple bank accounts, depending on what your UPI app supports. You can also pick/change the default account for that handle.
Security & Authentication Constraints
- UPI uses two-factor authentication: your device/SIM registered with the bank and your UPI PIN. Transactions fail on wrong PIN; repeated wrong PIN attempts may temporarily block outgoing UPI from your account (bank-controlled).
Cross-Border & Special Corridors
Foreign Inward Remittance via UPI is a defined product category and is part of the ₹2,00,000 specific-use bucket noted by NPCI. (Standard domestic P2P/P2M remains under the usual caps)
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