The National Payments Corporation of India (NPCI) has asked issuer banks, payment service providers (PSPs), and platforms that offer UPI Lite to enable and activate the so-called transfer out feature by March 31
UPI Lite is one-way, which means that users can add funds to their wallets but not withdraw them. To check their balance, users must disable their UPI Lite account. According to the NPCI's website: "Upon clicking the disable button on UPI Lite, the balance funds available with the bank in the Lite account shall be released to the customer's account."
UPI Lite enables users to conduct low-value transactions without requiring a UPI PIN. The payment service uses the NPCI Common Library application to process low-value transactions of less than Rs500.
Key updates in UPI LITE
The 'transfer out' functionality has been introduced, allowing users to withdraw funds from their UPI LITE balance and transfer them back to the source bank account without disabling UPI LITE.
Enhanced reconciliation mechanism: All Issuer Banks that use UPI LITE must maintain Lite Reference Number (LRN) balances and reconcile daily with NPCI data. This step is intended to maintain accurate transaction records and seamless financial operations.
Strengthened security measures: UPI apps with active UPI LITE must now use an app passcode, biometric authentication, or a pattern-based lock to login. This move is expected to improve user security by preventing unauthorized access.
Compliance Deadline
The NPCI has directed all stakeholders to implement these changes by the end of March 2025, ensuring seamless adoption throughout the UPI ecosystem. Except for the new modifications, the existing UPI LITE guidelines will remain unchanged.
How To Enable UPI LITE
Open the UPI app on your mobile device
On the home screen, locate and tap the option to enable UPI LITE
To proceed, please carefully read and agree to the terms and conditions
Enter the amount that you want to add to UPI LITE
Select the linked bank account for the transaction
Enter your UPI PIN to authenticate the setup
Once the process is complete, UPI LITE will be activated, allowing for seamless low-value transactions without the need for a UPI PIN.
