To promote the adoption of UPI-Lite wallet in regions with limited or no internet access, the Reserve Bank of India (RBI) has raised the maximum limit for offline payment transactions from Rs 200 to Rs 500. However, the overall cap for offline transactions on a payment instrument remains fixed at Rs 2,000.
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As per an RBI notification, “As per the announcement made in the Statement on Development and Regulatory Policies dated August 10, 2023, the upper limit for offline payment transactions has been increased to Rs 500. Other instructions mentioned in the framework will continue to remain in effect.”
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This adjustment aims to facilitate quicker, more reliable, and contactless payments for small-value everyday purchases and transit payments. This change removes the need for two-factor verification for transactions of lower value.
What is UPI Lite? UPI Lite is a feature within an on-device wallet that allows users to make real-time small-value payments without requiring a UPI PIN.
How to use UPI Lite? First, funds need to be transferred from your bank account to the app’s wallet. Then, this amount can be used for payments through UPI Lite directly from the wallet.
Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at the State Bank of India, explains, “Both UPI Lite and NCMC card function as wallets, and the pre-loaded money in the app/card can be spent in offline mode, meaning payments can be made without an internet connection. Credits into the account, however, will be processed online. The increase in the transaction limit to Rs 500 will enhance the usage of cashless transactions through UPI Lite and NCMC card.”
Key RBI Notification Pointers
- RBI increases offline payment transaction limit from Rs 200 to Rs 500 to promote UPI-Lite wallet.
- Overall limit for offline transactions on a payment instrument remains Rs 2,000.
- Adjustment aims to facilitate faster and contactless payments for small-value purchases.
- No need for two-factor verification for small-value transactions.
- UPI Lite is an on-device wallet feature for real-time small-value payments without UPI PIN.
- Funds transferred from bank account to app’s wallet for UPI Lite usage.
- UPI Lite and NCMC card function as wallets, allowing spending in offline mode.
- Credits to the account processed online; NCMC card can be used for various transactions.
- Group Chief Economic Advisor, Dr. Soumya Kanti Ghosh, at SBI, highlights the benefits of increased transaction limit for UPI Lite and NCMC card.
