RBI Increases the Cap on UPI Lite Wallets to INR 5,000

The Reserve Bank of India (RBI) raised the UPI Lite wallet limit from INR 2,000 to INR 5,000 in an effort to further boost the nation's adoption of digital payments. On December 4, the central bank also declared that the offline transaction limit for the UPI Lite service would be raised from the existing INR 500 to INR 1,000 per transaction. The new restrictions will take effect right away.

RBI Amends its Framework

As a result of the RBI's amendment to its framework for facilitating minor value digital payments in offline mode, the new changes were implemented. The framework stipulates, among other things, that a payment instrument may not exceed INR 2,000 in total at any given moment and that the maximum amount for offline digital payment transactions is INR 500. According to the notification, the offline framework has been modified, and the increased limitations for UPI Lite are INR 1,000 per transaction, with INR 5,000 being the maximum limit at any given time.

Launched in 2022, UPI Lite allows customers to conduct small-value transactions online without a PIN or internet connection. The solution allows offline debit for payments but only allows credits to be made once the user is online, avoiding the need for a bank's basic banking systems in real-time. This comes a few months after the central bank announced plans to raise the UPI Lite transaction ceiling to INR 1,000 following the October meeting of its Monetary Policy Committee.

Next to Increase Per Transaction Limit of UPI123 Pay

Additionally, the RBI had stated that the existing INR 5,000 per transaction restriction for UPI123 Pay would be raised to INR 10,000. In an effort to increase the use of UPI payments throughout the nation, the RBI has been aggressively testing out new UPI products at the same time. RBI governor Shaktikanta Das introduced UPI Circle in August 2024, enabling users to connect with reliable secondary users on the UPI app for partial or complete payment delegation.

UPI Tap & Pay and Hello UPI!

UPI Tap & Pay, which allows users to make payments by tapping their phone on a contactless reader, and Hello UPI, a conversational UPI payment solution, were both introduced by the National Payments Corporation of India (NPCI) last year. Digital payments are still growing throughout the nation because of rising internet and smartphone usage.

In November 2024, UPI recorded INR 1,548 Cr transactions, a 38% increase over the INR 1,100 Cr transactions recorded during the same period last year. In the meantime, the value of transactions on the payments infrastructure increased from INR 17.4 Lakh Cr in November 2023 to INR 21.55 Lakh Cr last month, a 24% increase.

Paytm Launches UPI Lite Auto Top-Up for Payments Under INR 500

Paytm launches UPI Lite Auto Top-Up, designed for hassle-free everyday payments under INR 500, enhancing convenience for small transactions.

StartupTalkyNitin Konde