Federal Bank introduced a simplified feature called UPI (Unified Payment Interface) Lite, specifically designed for small-value digital payments.
This functionality was launched in collaboration with the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) in September 2022.
Popular UPI platforms such as BHIM, Paytm, PhonePe, and Google Pay have also embraced UPI Lite.
With UPI Lite, users can easily deposit funds into their on-device wallet and conveniently make small, offline payments to merchants without the need for a UPI PIN.
The bank mentioned in a statement that the system operates using current UPI system rules for mobile phones to ensure consistency, compliance, and system approval.
The UPI LITE experience is designed to be user-friendly, allowing small transactions without the need for real-time access to the sender’s bank’s Core Banking System (CBS), while still ensuring sufficient risk management.
Shalini Warrier, Executive Director of Federal Bank, mentioned that UPI has played a crucial role in India’s digital progress.
The introduction of UPI Lite to this system provides customers with a quicker, more effective, and budget-friendly choice for cash transactions.
How to use UPI Lite?
Federal Bank mentioned that customers can activate the UPI Lite feature on their current UPI apps that have Lite functionality.
“The steps include logging in, agreeing to the terms, entering the amount, choosing the connected bank account, and confirming the request with the UPI PIN,” according to a statement from Federal Bank.
It also mentions that a UPI Lite account can be set up using the current UPI app.
Transaction Limit for Customers
As per the information provided by Federal Bank, here are the limits for UPI Lite transactions:
1. Per transaction limit: Up to Rs 500
2. Maximum cumulative usage per day: Rs 4,000
3. Maximum balance in UPI Lite account at any time: Rs 2,000
Limit exceeded
Recently, the RBI has raised the highest amount allowed for offline payments from Rs 200 to Rs 500.
The overall limit for offline transactions using payment methods is always Rs 2,000.
The RBI notification was given on August 24, 2023. It stated that, as per the announcement in the Statement on Development and Regulatory Policies on August 10, 2023, the maximum limit for offline payment transactions has been raised to Rs 500.
The other instructions mentioned in the framework will continue to apply as they were before.
On August 10, 2023, the RBI raised the limit for transactions from Rs 200 to Rs 500 to encourage more people to use online UPI Lite.
