UPI Lite Update: NPCI has given a big relief to the customers using UPI Lite. Till now UPI Lite users could not transfer their balance back to their bank account. But now this rule is going to change soon. NPCI issued a circular on 21 February 2025, in which all the issuer banks, payment service provider (PSP) banks and apps supporting UPI Lite have been directed to implement the ‘transfer out’ facility by 31 March 2025.
What is ‘Transfer Out’ facility?
According to NPCI, all banks and apps will implement the ‘Transfer Out’ feature. This feature will allow users to transfer their UPI Lite balance back to the same bank account from where they added the money. Purpose code 46 will be used for this. This will help identify ‘transfer out’ transactions.
How did UPI Lite work now?
Currently UPI Lite is a one-way service, in which users can only load money in their wallet. But they cannot transfer it back to their bank account. If a user wanted to withdraw his UPI Lite balance, he had to disable his UPI Lite account. According to NPCI, as soon as the user pressed the ‘disable’ button, his entire balance would go back to the bank account.
Why is UPI Lite special?
UPI Lite is designed for small and fast transactions. It also works on offline balance. It does not require internet connection. It is very useful for small payments such as grocery stores, tea shops, or auto-rickshaw fare.
What is UPI Lite
UPI Lite is a way of making digital payments. It is designed for small transactions. It is especially useful for people who make small payments every day. Currently, the maximum transaction that can be done in UPI Lite at a time is up to Rs 500. Apart from this, the maximum spending limit in a day is Rs 4,000. You can keep a maximum balance of up to Rs 2,000 at a time.
It will be easy to withdraw balance from UPI Lite
According to Kiwi company’s co-founder and CBO Mohit Bedi, till now UPI Lite could be used only for transactions after loading money once. This simply means that users could not send their balance back to their bank account. This affected their liquidity. After this, from April 1, 2025, UPI Lite users will be able to transfer their balance directly to the bank account without disabling their account.
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