In its monetary policy committee meeting (MPC) today, RBI decided to upgrade UPI Lite to enable users to conduct transactions up to Rs 500 offline.
The Reserve Bank of India (RBI) announced on August 10, 2023, increased the offline transaction limit for UPI Lite from Rs 200 to Rs 500. In announcing the decision, RBI Governor Shaktikanta Das said MPC endorsed three initiatives to boost digital payments in the country.
"It is proposed to enable 'Conversational Payments' on UPI, which will enable users to engage in conversation with AI-powered systems to make payments; introduce offline payments on UPI using Near Field Communication (NFC) technology through 'UPI-Lite' on-device wallet; and enhance the transaction limit for small value digital payments in off-line mode from Rs 200 to Rs 500 within the overall limit of ₹2000 per payment instrument," Das said.
UPI Lite
UPI Lite, initially designed to handle small-value transactions up to Rs 200, has been upgraded to accommodate transactions up to Rs 500. Unlike traditional UPI transactions, which boast a daily ceiling of Rs 1 lakh, under UPI Lite, individuals can load up to Rs 4,000 daily and conduct instant transactions capped at Rs 500 without the need to input a PIN.
UPI Lite, launched in September 2022, is a collaborative initiative between the RBI and the National Payments Corporation of India (NPCI). Many UPI platforms such as BHIM, Paytm, PhonePe, and Google Pay have since adopted UPI Lite.
Benefits Of UPI Lite
UPI Lite accounts are linked to users' bank accounts but operate independently of the real-time bank's core banking system. This boosts payment success rates, during peak transaction hours, by avoiding payment failures from banking processing glitches. It will also de-clutter bank passbooks.
How To Use UPI Lite
Users must download a UPI Lite-enabled app like BHIM, Google Pay, PhonePe, or Paytm.
Then tap on the profile icon located in the top-right corner. Look for the 'UPI LITE' activation option and select it.
If your bank supports this feature, the application will allow you to activate UPI Lite. Follow the on-screen instructions to link your bank account and provide the necessary details as prompted. Receive a confirmation message upon successful activation.
Users can load up to Rs 2,000 into their UPI Lite accounts twice daily, totalling Rs 4,000. Now, users need to enter the recipient's UPI ID or scan a code and the amount of money they want to send.