National Payments Corporation of India (NPCI) has rolled out a new rule with regards to UPI Lite which will come into force from April 1, 2025. By releasing a new circular, the retail payments and settlement systems company has directed all banks to implement ‘Transfer Out’ functionality.
NPCI’s circular also states that this latest rule of ‘transfer out’ is aimed to enhance user convenience.
What is a transfer out functionality?
This is a new feature which will enable users to withdraw funds from their UPI Lite balance to the source bank account from which it was loaded without disabling UPI Lite.
NPCI has also said that all the issue banks live on UPI lite are supposed to maintain LRN (lite reference number) level balances and ensure that reconciliation is carried out on daily basis with NPCI data so that LRN balances are reconciled in sync with NPCI data on an ongoing basis.
The circular further reads that UPI app with active UPI Lite will have app passcode, biometrics or pattern-based lock at the time of app login. These changes are meant to be introduced by March 31, 2025. All the other guidelines for UPI Lite will remain same.
What is UPI Lite?
UPI LITE is a new payment solution that enables users to carry out PIN-less low value transactions below ₹500. The solution runs off existing UPI ecosystem protocols for mobile phones to ensure commonality, compliance and system acceptance.
It is a customer-friendly approach which enables low value transactions without utilising a remitter bank’s core banking systems in real-time.
Some of the benefits of UPI lite include uncluttered passbook for users, one single click factor authentication for UPI transactions of value less than ₹500.
What the current limits?
In October last year, RBI announced to raise UPI Lite wallet limit to ₹5,000 from ₹2,000. The UPI Lite per transaction limit was also raised to ₹500 from ₹100. The per transaction limit for UPI 123Pay will be raised from ₹5,000 to ₹10,000.
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