How NRIs can use UPI for instant, no-fee transactions abroad

Non-resident Indians (NRIs) now have a faster, more convenient option than traditional wire transfers to send money to family or make payments in India. The National Payments Corp. of India (NPCI) has extended UPI access to NRIs who hold non-resident external (NRE) or non-resident ordinary (NRO) accounts. This expansion allows NRIs to conduct instant transactions from their smartphones using UPI linked to their international mobile numbers, simplifying financial connections with India.

Setting up UPI for NRIs

NRIs must first link their international mobile numbers to their NRE or NRO bank accounts. This step is most important for enabling UPI or Unified Payments Interface transactions with their overseas numbers. Once linked, NRIs can download a UPI-enabled application compatible with international mobile numbers, such as iMobile or PhonePe.

After downloading the app, users must undergo an onboarding process, including mobile number verification. Then, they must create a unique UPI ID or virtual payment address (VPA) linked to their international mobile number. Finally, they select their bank account and submit the details to activate their UPI profile.

Supported countries, banks, and apps

NPCI has enabled UPI for NRIs residing in specific countries, including the US, Canada, the UK, the UAE, Singapore, Australia, and more. In terms of banks enabling UPI transactions, NRIs can access services from the list of specific banks. These include AU Small Finance Bank, Axis Bank, Canara Bank, City Union Bank, DBS Bank, Equitas Small Finance Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank, IndusInd Bank, Punjab National Bank, and South Indian Bank. Each of these banks offers services to support NRIs in managing their finances through UPI.

Presently, UPI applications that allow NRIs to make transactions from their international numbers include BHIM AU (by AU Small Finance Bank), FedMobile (by Federal Bank), iMobile (by ICICI Bank), BHIM Indus Pay (by IndusInd Bank), SIB Mirror+ (by South Indian Bank), and PhonePe. These apps ensure that NRIs can easily connect with their financial networks in India, regardless of their current location.

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How NRIs can use UPI

UPI enables NRIs to send money in Indian rupee for various purposes, such as paying Indian merchants, transferring to UPI IDs, or by scanning Indian QR codes. NRIs can also send money to any Indian mobile number or bank account, provided it’s UPI-enabled. With UPI, transactions are processed instantly, ensuring that the recipient’s account is credited almost immediately upon completion.

Currently, UPI transactions are conducted only in Indian rupee (INR). When you initiate a successful UPI transaction, the funds are credited to the beneficiary's account almost instantly. However, payments to a contact can only be made to Indian mobile numbers, and this is possible only if the recipient has a valid UPI/VPA ID linked to an Indian bank account.

It’s important for NRIs to remember that UPI transactions have certain daily limits. NPCI mandates a maximum transaction cap of ₹1 lakh per day, though this may vary slightly depending on the bank. In the case of newly registered UPI IDs, NRIs have an initial transaction limit of ₹5,000 for the first 24 hours, after which the full daily limit is restored.

Permissible transactions for NRIs

NRIs are permitted to conduct UPI transactions between NRE and NRO accounts, as well as with resident Indian accounts. However, transfers from an NRO account to an NRE account are prohibited. Permitted transaction combinations include NRE to NRE, NRE to NRO, and both NRE or NRO to resident accounts. If an NRI holds multiple bank accounts, each account must have a unique UPI ID, as multiple accounts cannot be linked to a single UPI/VPA ID.

Even if an NRI isn’t registered on UPI, they can still receive funds through the ‘send to account’ option on the UPI app. This option allows the sender to enter the recipient’s bank account details manually.

Considerations for joint account holder

For NRIs with jointly held accounts, UPI is limited to the primary account holder, who can generate a single UPI ID and access it on one device only. This limitation ensures secure and controlled access, particularly in joint accounts with multiple account holders.

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Convenient and low-cost option

While UPI remains usable across borders, NRIs can transact even when travelling to India or other countries. There’s no need for re-registration with a local mobile number when switching locations. If NRIs encounter cellular connectivity issues, they can rely on Wi-Fi to make UPI payments, even when international roaming is inactive.

According to the NPCI website, UPI transactions for NRIs are free, making it a cost-effective option for payments in Indian rupee. With the inclusion of NRIs, UPIs have become a convenient and low-cost option for supporting families, handling routine transactions, and being financially connected to India.

"It’s undoubtedly a very commendable step that enables NRIs to transfer and spend money in India in a very smooth, easy, and quick way" said Dipen Shah, co-founder at NRI FinOne.

“Still many NRIs are facing some practical issues while activating UPIs on their foreign numbers, but I think in a couple of months it will get resolved and many other banks will also start the same,” Shah added.

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