The Reserve Bank of India (RBI) governor Shaktikanta Das on 10 August 2023 announced a hike in the transaction limit for transactions done on UPI (Unified Payment Interface) lite and on National Common Mobility Card (NCMC) from Rs 200 to Rs 500. However no changes have been made on the maximum storage limit of Rs 2000.
The RBI governor also announced that it will launch a “Conversational Payments” on UPI. It will enable users to engage in a conversation with an Artificial Intelligence powered system to initiate and complete transactions in a safe and secure environment.
To encourage the use of UPI lite the RBI governor said that to reduce transaction failure on UPI payment “ offline transactions using 'Near Field Communication (NFC)' technology will be introduced.. This feature will not only enable retail digital payments in situations where internet / telecom connectivity is weak or not available, it will also ensure speed, with minimal transaction declined”.
UPI lite has been designed by National Payment Corporation of India (NPCI) on the UPI platform and it was introduced by RBI in September 2022 to facilitate faster and easier low value transactions in offline mode.
For UPI transactions the mobile phone which is used for transaction purposes needs to be net connected . To enable small value transactions where there is no net connection ,UPI lite has been launched.
For bank customers who are using the UPI app , the bank provides a refillable ‘on-device stored value’ on their mobile phone .
The customer can transfer upto Rs 2000 into the 'on-device stored value’ from their bank account using UPI app.
The customer can make offline transactions upto Rs 500 using UPI lite.There will be no need for using UPI PIN or passcode for completing the transactions.
National Common Mobility Card (NCMC)
The National Common Mobility Card (NCMC) was launched in India with the tagline of ‘One Nation One Card’ in March 2019. It is a combo card which offers a combination of a debit / credit with a prepaid card, mainly wallet.
The main aim of the NCMC is to provide for a single card for travelling on buses.trains ,and airlines within India.
Unified Payment Interface (UPI)
The Unified Payment Interface (UPI) has been developed by NPCI and went live in 2016. It is a mobile based 24x7 fast payment system to send and receive funds instantly using a Virtual Payment Address (VPA) set by the user itself.
UPI facilitates immediate money transfer , QR code (scan and pay) based payments, merchant payments, utility bill payments, etc.
It also facilitates non-financial transactions such as mobile banking registration, balance enquiry, etc., can also be carried out using UPI.
Transaction limit on UPI
For normal UPI transactions a maximum of 20 transactions can be done with a maximum value limit of Rs one lakhs per day.
For a few specific categories of transaction in UPI like Capital Markets( for buying of shares etc on a stock exchange etc), Collections(bill payments etc), Insurance, Foreign Inward Remittances the transaction limit is up to Rs 2 lakh per day.
The limit for applying for Initial Public Offering through ASBA (Application Supported by Blocked Amount ) and for buying government securities through the Retail Direct Scheme is up to Rs 5 lakh per transaction.
National Payments Corporation of India (NPCI)
NPCI, an umbrella organisation for operating retail payment and settlement systems in India, has been initiated by the 'RBI' and the 'Indian Banks' Association' (IBA) under the 'Payment and Settlement Systems Act, 2007'.
It is a 'not-for-profit' company established under the provisions of Section 25 of the Companies Act 1956 (as amended in 2013), with the objective of providing physical and electronic payment infrastructure to the entire banking system in India.
It was set up in 2008.
It is owned by a consortium of commercial banks .
NPCI Headquarters : Mumbai
Chief Executive Officer : Dilip Asbe