The National Payments Corporation of India (NPCI) has introduced a new feature called ‘Transfer Out’ for UPI Lite. As per the circular dated February 21, 2025, all issuer banks, PSP Banks, and UPI Apps must implement this feature by March 31, 2025.
What is the ‘Transfer Out’ Feature?
The ‘Transfer Out’ functionality allows users to transfer funds from their UPI Lite balance back to the original bank account without needing to disable UPI Lite. This update enhances user control over funds while ensuring seamless small-value transactions.
Key Features of the ‘Transfer Out’ Functionality
- Balance Tracking & Reconciliation: Banks offering UPI Lite must track balances at the Lite Reference Number (LRN) level and reconcile them daily with NPCI data to ensure accuracy.
- Enhanced Security: Users with active UPI Lite accounts must authenticate using a passcode, biometric verification, or pattern-based lock when logging into UPI apps.
- Implementation Deadline: All member banks and platforms must integrate these changes by March 31, 2025.
- Existing Guidelines Remain Unchanged: Other than the new feature implementation, all previous UPI Lite guidelines will continue to apply.
Understanding UPI Lite
UPI Lite is a payment solution designed for PIN-less transactions, allowing quick and seamless payments for small-value transactions under Rs 500. This system enhances transaction speed and user convenience within the UPI framework.
In October 2024, the Reserve Bank of India (RBI) increased transaction limits for UPI Lite:
- Wallet Limit: Increased from Rs 2,000 to Rs 5,000.
- Per-Transaction Limit: Raised from Rs 100 to Rs 500.
- UPI 123Pay Limit: Increased from Rs 5,000 to Rs 10,000 per transaction.
With the new ‘Transfer Out’ feature, users now have greater flexibility in managing their UPI Lite balances while continuing to enjoy the convenience of instant digital payments.
