NPCI Examines AI-Led Compliance Model for UPI Ecosystem

The National Payments Corporation of India (NPCI) is exploring the use of artificial intelligence-led workflows to speed up compliance processes linked to the Unified Payments Interface (UPI), according to a Business Standard report. 

Banks currently take between 4 and 8 weeks to complete certification requirements after NPCI issues operating circulars related to UPI. These circulars contain technical and policy instructions that must be implemented across the payments network. 

The proposed system could reduce the process to around 7 to 10 days through automated coordination between NPCI and banks. 

Growing Number of UPI Updates 

UPI has seen regular feature additions and system changes over the past few years, increasing the number of compliance requirements for ecosystem participants. 

In 2025-26, NPCI issued more than 30 operating circulars related to UPI. These were applicable to banks and third-party payment applications including PhonePe, Google Pay and Paytm. 

The circulars are meant to maintain standard processes across the payments network, particularly as transaction volumes and product use cases continue to rise. 

Banks To Build Their Own AI Systems 

Reports suggest that NPCI is not planning to install its own AI systems within banks. Instead, banks would need to develop their own internal AI agents capable of interacting with NPCI systems through secure channels. 

These systems could be used to identify compliance issues, manage dependencies, and exchange technical information during certification procedures. 

Human involvement is expected to remain part of the process, especially during final approvals, testing, and certification stages. 

Protocols and Early Development 

NPCI may either use open communication standards already available globally or develop its own framework for these interactions. 

The work is still at an early stage and implementation is expected to take time. NPCI is likely to hold discussions with banks and technology service providers before moving ahead. 

Earlier this year, NPCI introduced FiMI, a language model designed for the Indian payments ecosystem. The model was developed to support payment-related functions including dispute handling, mandate management and UPI-related processes. 

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Conclusion  

The payments body is examining automated workflows to manage rising compliance requirements across the UPI ecosystem. Human oversight is expected to remain part of the certification process. 

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