RBI’s Bold Move: Upping UPI Lite Transaction Limits to Boost Digital Payments

byPriyanka JuyalAugust 17, 2023
RBI elevates UPI Lite transaction limits
RBI elevates UPI Lite transaction limits

Key Highlights:

  • RBI proposes increasing UPI Lite’s offline transaction limit from Rs 200 to Rs 500, encouraging digital payment adoption.
  • Enhancing access, RBI integrates NFC technology into offline UPI Lite transactions, aiding areas with limited connectivity.
  • RBI pioneers AI-driven conversational payments on UPI Lite, initially supporting Hindi and English, with plans for language expansion.

In a move aimed at expanding the adoption of digital payments and enhancing user convenience across the nation, the Reserve Bank of India (RBI) has put forth a proposal to raise the transaction limits for UPI Lite. As of August 10, the RBI has suggested an increase in the per transaction payment threshold for UPI Lite when used in offline mode, elevating it from Rs 200 to Rs 500.

Presently, in offline mode, the RBI has set a transaction cap of Rs 200 per individual transaction and an overall ceiling of Rs 2,000 per payment for digital transactions, encompassing both National Common Mobility Card (NCMC) and UPI Lite transactions.

Know: How to Set up a UPI Lite Account on Paytm?

The forthcoming adjustment will see a hike in the one-time transaction cap to Rs 500 in offline mode. It’s important to note that the daily cumulative transaction limit will remain unchanged at Rs 2,000.

RBI Governor Shaktikanta Das, in his announcement following the monetary policy committee meeting, shared insights behind this move. He stated, “With the objective of harnessing the new technologies for enhancing digital payments experience for users it is proposed to… enhance the transaction limit of small value digital payments in offline mode to Rs 500 from Rs 200 within the overall limit of Rs 2,000 per payment instrument. These initiatives will further deepen the reach of digital payments in the country.

Explaining why the transaction limit is going up, the RBI MPC mentioned ‘By removing the need for two-factor authentication for small value transactions, these channels enable faster, reliable, and contactless mode of payments for everyday small-value payments, transit payments, etc. Since then, there have been demands for enhancing these limits. To encourage wider adoption of this mode of payments and bring in more use cases into this mode, it is now proposed to increase the per transaction limit to Rs 500

To make UPI Lite even more popular, the RBI is planning to introduce a new way of making payments offline using UPI Lite and Near Field Communication (NFC) technology. This advancement will make it possible to use UPI Lite even in places with no or limited internet connection.

But that’s not all – the RBI has more plans to improve UPI Lite. One interesting feature they’re adding is called “Conversational Payments.” This feature will allow users to make payments by talking to an AI-powered system. These conversations can happen on messaging or chat apps, making the payment process smoother and more user-friendly.

Read more: RBI Unveils Enhanced UPI Capabilities

At first, “Conversational Payments” will be available in Hindi and English. However, the RBI has plans to include other Indian languages in the future. To make sure this new feature works well, the RBI will provide guidelines to the National Payments Corporation of India (NPCI) to help implement it effectively. These efforts show the RBI’s commitment to making digital payments easier and more accessible for everyone in the country.

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