UPI Set to Disable Inactive UPI IDs, NPCI Issues New Guidelines

The NPCI has issued new guidelines mandating the deactivation of inactive UPI IDs after December 31, 2023
UPI Guidelines
UPI Guidelines

The National Payments Corporation of India (NPCI) has released guidelines to deactivate inactive unified payments interface (UPI) IDs and associated UPI numbers in order to secure the UPI ecosystem and prevent wrong transfer of funds.

NPCI said this in a release on November 16, 2023, coinciding with an announcement by the Reserve Bank of India (RBI) that UPI transactions had crossed 11 billion.

The UPI, a revolutionary platform enabling swift and convenient fund transfers between bank accounts via smartphones, has witnessed a remarkable surge, with a billion transactions added within a mere two months, taking the total transactions to an unprecedented 11 billion. But this burgeoning user base has now prompted the NPCI to issue the following directives.

All banks, third party apps, such as PhonePay and Google Pay will deactivate and shut down inactive UPI IDs. NPCI has allotted time till December 31, 2023 for this. Thus, users must activate their UPI ID before this date to avoid cancellation of their dormant UPI IDs. Meanwhile, before deactivating the users UPI ID, the bank will give a notification to the users through email or message.

NPCI’s Directives

NPCI said in its directive: “It has come to our attention that customers may change to a new mobile number without disassociating their previous number from the banking system. In accordance with the guidelines stipulated by the Telecom Regulatory Authority of India (TRAI), there exists the possibility of reallocation of the old mobile number to new user.”

NPCI’s directive requires all banks and third-party apps to embark on the deactivation of dormant UPI IDs. The focus rests on IDs that have remained inactive, and devoid of any transactions for a period extending to one year. These inactive accounts will have their ability to receive money (inward credit transactions) turned off. Additionally, the phone number linked to these accounts will be removed from the UPI system, the NPCI release said.

Accordingly, customers with inward credit block UPI IDs and phone numbers will need to re-register their accounts in the UPI apps. This step is to link their accounts back within the UPI system.

Once re-registered, users can make payments and non-financial transactions using their UPI PIN as usual.

Before initiating payments to contacts or mobile numbers, UPI apps shall perform Requester Validation (ReqValAd), the release added. This is being done to ensure that the name shown during a transaction is the accurate customer name, and will prevent any wrong fund transfer.

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