Reserve Bank of India, on August 24, 2023, announced increasing the upper limit for offline transactions to Rs 500. This decision, initially announced during RBI's bi-monthly policy review on August 10, 2023, has now been implemented, according to an RBI statement.
It clarified that while the cap per transaction has been raised to Rs 500, the overall limit is kept at Rs 2,000 to safeguard against potential risks of bypassing the two-factor authentication. "Other instructions in the framework shall remain applicable as before," RBI said.
The framework is designed to facilitate small-value digital payments in offline mode, involving cards, wallets, and mobile devices, applicable to Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs), including acquirers and issuers like banks and non-banks, RBI said. Offline digital payments are transactions done without using the Internet.
Offline transactions for small-value digital payments can be carried out through various means, including the National Common Mobility Card (NCMC) and UPI Lite.
The transaction limit for UPI Lite, which operates in offline mode, has been raised from Rs 200 to Rs 500. Individuals can load up to Rs 2,000 twice daily and conduct instant transactions, each capped at Rs 500. Notably, these transactions can be done without entering a Personal Identification Number (PIN). This move by the central bank aims to increase UPI Lite's acceptance, introduced in September 2022 to speed up small-value transactions and reduce transaction failures from technical glitches in bank servers.