Federal Bank floats UPI lite facility for small-value digital payments; check details

Federal Bank has floated UPI (Unified Payment Interface) Lite functionality for small-value digital payments for its customers. The Reserve Bank of India (RBI) introduced UPI Lite in September 2022, which is a joint initiative between the central bank and the National Payments Corporation of India (NPCI). Many UPI platforms such as BHIM, Paytm, PhonePe, and Google Pay have since adopted UPI Lite. UPI Lite allows its users to store money in their UPI Lite on-device wallet and make small, offline payments to merchants without using a UPI PIN.

Federal Bank in a statement said: “The solution runs off existing UPI ecosystem protocols for mobile phones to ensure commonality, compliance and system acceptance. UPI LITE experience is intended to be a customer-friendly approach to enabling low value transactions without utilizing a Remitter bank’s core banking systems (CBS) in real-time, while providing adequate risk mitigation.”

Shalini Warrier, Executive Director, Federal Bank said, “UPI has been at the centre of India’s digital revolution and the addition of UPI Lite to this ecosystem provides customers a faster, more efficient and cost-effective alternative to cash transactions."

How to use UPI Lite (For Federal Bank customers)

Federal Bank has said customers can enable the UPI Lite feature on their existing UPI app that supports the Lite functionality.

“The process involves logging in, accepting terms and conditions, specifying the amount, selecting the linked bank account, and confirming the request with their UPI PIN,” stated the Federal Bank press release. A UPI Lite account can be created within the existing UPI app, the note further said.

Transaction limits for FB customers

As per the Federal Bank press release, these are the transaction limits for UPI Lite:

> Per transaction limit: up to Rs 500
> Maximum Cumulative usage per day: Rs 4,000
> Maximum balance in UPI Lite account at any point of time: Rs 2,000

Limit increased

Recently, the RBI increased the upper limit of an offline payment transaction from Rs 200 to Rs 500. The overall limit for offline transactions on a payment instrument is Rs 2,000 at all times.

“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,” an RBI notification issued on August 24, 2023, stated.

On August 10, 2023, RBI raised the transaction limit from Rs 200 to Rs 500 in an effort to promote the widespread adoption of UPI Lite online.

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