UPI Lite can now add money to wallet from your bank account without needing approvals

New Delhi,UPDATED: Jun 7, 2024 15:15 IST

The Reserve Bank of India (RBI) has announced a new update for the UPI Lite system to encourage broader adoption and simplify the user experience. The latest proposal brings UPI Lite under the e-mandate framework, allowing users to automatically replenish their UPI Lite wallets without needing any additional approvals from their bank accounts. Here is everything we know.

This auto-replenishment feature is designed to activate when the wallet balance falls below a user-defined threshold. This means that users will no longer have to manually top up their wallets every time the balance is low, thereby streamlining the process for small-value digital payments. This change is expected to further increase the ease and frequency of using UPI Lite for daily transactions, promoting a more cashless society.

Launched in September 2022, UPI Lite was designed to facilitate quick and hassle-free small-value payments through an on-device wallet. This payment solution allows users to handle transactions with ease, especially those below Rs 500. The UPI Lite system uses the robust NPCI Common Library (CL) application to process payments, ensuring smooth integration with the existing UPI infrastructure on mobile phones. This system provides a consistent, compliant, and widely accepted platform for users.

As of now, UPI Lite users enjoy a daily transaction limit of Rs 2,000, with the upper limit for any single payment set at Rs 500. These limits are particularly useful for managing everyday transactions such as groceries, public transport, or small retail purchases, where speed and convenience are paramount.

UPI Lite aims to provide a user-friendly solution for managing small-value transactions. By bypassing the need for real-time processing by the remitter bank’s core banking systems, UPI Lite ensures that these transactions are fast and convenient, while still maintaining adequate security measures.

The introduction of the e-mandate for UPI Lite is a strategic move by the RBI to boost digital payment adoption across the country. However, there are chances that several users might not be comfortable with this feature and have privacy issues because this option won't require one's approval for the auto addition of money to wallets from banks. It remains to be seen whether users will get the option to disable this feature if they don't want to use it.