Now, Transact Without Internet And PIN On UPI Lite With PNB, SBI, HDFC Bank And 5 Others Banks

Reserve Bank of India Governor Shaktikanta Das on September 20, 2022 officially launched the Unified Payment Interface (UPI) Lite service. This is a partially offline payment solution product.

The National Payments Corporation of India (NPCI) first announced the development of this new product–UPI Lite, way back in March 2022, and now with its official launch with eight banks, you can start using this service immediately on the BHIM UPI App. 

For now, UPI Lite is supported only on the Bhim UPI App. NPCI has said that in future other apps will also support UPI Lite.

The eight banks where UPI Lite is currently supported are, Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, and Utkarsh Small Finance Bank. 

Union Bank of India announced in a release that they had partnered with Kiya.ai, a technology service provider, for providing the technical support of UPI Lite, UPI on credit card, and other such related services for Union Bank of India customers.

Here are some things you should know before you start using UPI Lite.

What Is UPI Lite?

UPI Lite is a digital non-interest bearing wallet, which is an added complimentary technology over the standard UPI functionality. This means you have to add money to your UPI Lite Wallet first, and then transact with others without the use of Internet and UPI PIN. 

But do note that to set up UPI Lite, you will need both Internet connection as well as the correct UPI PIN of your bank account.

Shilpa Mankar Ahluwalia, partner and head, FinTech division, Shardul Amarchand and Mangaldas and Co, a legal firm, said that UPI Lite will transform small value everyday payments.

"Payments lower than Rs. 200 can now be made offline which makes usage in remote pockets or areas with poor internet connectivity possible. UPI Lite is the next step in offline payments innovation in India as it enhances the convenience of small value payments for the common consumer and is also aligned with the policy goals of financial inclusion," Ahluwalia added.

UPI Lite Wallet Functionality Key Aspects

No Interest Wallet: The money in your UPI Lite wallet will give you no interest, and it will be kept in your own bank account only. 

“No interest will be payable on the UPI Lite balance. The actual money or funds with respect to your UPI Lite balance is held and maintained with your Issuing Bank” UPI Lite mentioned in the terms and conditions on its FAQ section page.

Transaction Entry In Passbook: Your bank passbook will show the UPI Lite wallet money loading entry. Regarding daily transaction history using UPI Lite, you will get an intimation by SMS once a day from your bank about this. Your passbook will only contain the wallet loading entry, and not the transaction entry.

“UPI Lite transactions other than top-up transactions will not be displayed in the statement (pass book) of your account. You will receive an SMS once a day for UPI Lite transactions from your Issuing Bank, containing the history of transactions carried out during the day,” read the terms and conditions of UPI Lite.

Transaction Limit: There is also a transaction limit for UPI Lite transactions. The upper limit will be maximum Rs. 200 per transaction, and the maximum amount of money which you can deposit in your UPI Lite wallet at any point of time will be Rs. 2,000.

How To Start Using UPI Lite?

You have to first register your bank on the BHIM UPI App on the UPI network, even if you have already registered it with Google Pay, PhonePe, and others. There are no charges for separately using the BHIM UPI App.  

To register your bank account in any UPI App for the first time, including BHIM, you will need your bank account linked SIM card inserted and active on your phone, including an active outgoing SMS facility.

Once you have enabled UPI Lite functionality on the BHIM UPI App, all transactions below Rs. 200 will be processed automatically using this. You will also get a smart top-up reminder, as and when your UPI Lite wallet balance is low. If you decide to disable UPI Lite in future, then any funds lying in your wallet will be automatically credited back to your bank account. 

You will also have to enable the security settings, such as passwords and/or biometrics on the BHIM UPI App for using UPI Lite, since the transactions require no PIN.

Saket Modi, co-founder and CEO of Safe Security, a digital business risk quantification company, was one of the original security contractors for the BHIM UPI app.  He had previously told Outlook Money on a UPI security magazine article that the SIM card has certain unique cryptographic keys which UPI uses to hard bind your phone with its server, so that even if you switch mobiles, all you have to do is use the same sim card, and you are good to go to use UPI on your new device.