The Reserve Bank of India has increased the maximum limit of an offline payment transaction from Rs 200 to Rs 500 in order to encourage the use of the UPI-Lite wallet in areas where internet connection is limited or unavailable. The aggregate limit for offline transactions on a payment instrument, on the other hand, stays at Rs 2,000 at all times.

The RBI released a notification that stated “As announced in the Statement on Development and Regulatory Policies dated August 10, 2023, the upper limit of an offline payment transaction is increased to Rs 500. Other instructions mentioned in the framework shall continue to remain applicable as before,”.

According to reports, this would enable quicker, more reliable, and contactless payments for small-value everyday purchases, transit payments, and other applications by eliminating the requirement for two-factor authentication for small-value transactions.

Also Read: Essential Money Protection Tips Staying Safe Amid Rising UPI Scams

What is UPI Lite?

UPI Lite is an on-device wallet functionality that allows users to make real-time small-value payments without needing to enter their UPI PIN.

How does UPI Lite work?

Money must be sent from your bank account to The app’s wallet. This amount may then be used to make payments from the wallet using UPI Lite.

Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India said “Both UPI lite and NCMC card work as a wallet and the pre-loaded money in App/Card can be spent near offline mode, i.e. debit (payments) can be made without an Internet connection and credits into the account will be done online. As the NCMC card can be used at ATMs, online payments, etc., the increase in transaction limit to Rs 500 will enhance the use of cash-less transactions through UPI lite and NCMC card,”.