Which Bank will offer an exclusive UPI Lite Account?

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 Which Bank will offer an exclusive UPI Lite Account?

Blog Author: Nayakanti Prashant – Safe ePayments Motivator

Tags: #upi #upilite #kyc #safeepayments #finfiction

Introduction to UPI Lite: -

Reserve Bank of India : As an efficient strategy to process large-scale small value digital payments and based on the guidelines issued by RBI for enabling mobile devices to support offline payments vide its circular no. CO.DPSS.POLC.No. S1264/ 02-14-003/2021-2022 titled “Framework for facilitating small value digital payments in offline mode” dated 3rd January 2022, NPCI has designed the “UPI Lite – On-Device wallet” (“UPI Lite”) functionality for UPI user (User).

NPCI Circular No: NPCI /UPI/OC No.138/2021-22 March 16, 2022 addressed to ‘All UPI Member Banks’



UPI Lite rollout is planned under two phases.

In phase 1, UPI Lite will process transactions in near offline mode i.e. debit offline and credit online,

In phase 2 UPI Lite will process transactions in complete offline mode i.e. debit and credit both offline.

A User of UPI App will have the option to enable UPI Lite i.e. “On-Device wallet” on her/his UPI App.

Once enabled, the User can allocate funds from her/his bank account to UPI Lite.

Such funds shall reside with the User’s bank in an escrow / pool / designated account and such balance shall reside on-device on the common library (CL) of the User’s UPI App.

At present, only debit from UPI Lite balance shall be permitted and all credits to UPI Lite (including refunds, etc.) will be processed online in the User’s bank account maintained in the bank’s core banking system.

The upper limit of an UPI Lite payment transaction shall be ₹200/-.

The total limit of UPI Lite balance for an “On-device wallet” shall be ₹2,000/- at any point of time.

The User can have multiple such UPI Lite on-device balances depending on the number of UPI Apps used by the User to access one designated bank account.

 The UPI App shall, by default, use UPI Lite balance for transactions having value of less than or equal to Rs 200/- excluding peer-to-peer collect request transactions.

 The User shall receive the consolidated debit SMS for financial transactions at regular intervals after the transactions are presented to the User’s bank.

 

Why UPI Lite Account??

All UPI Issuer Banks may not have the technical capability for this: -

Such funds shall reside with the User’s bank in an escrow / pool / designated account and such balance shall reside on-device on the common library (CL) of the User’s UPI App.

UPI Lite Account is a good option to increase UPI Lite transactions

 

Proposed features of UPI Lite Account

A)     Maximum Balance limit INR10,000/- including tagged UPI Lite Wallet Accounts excluding UPI Lite refunds

B)     No Cash transactions, No Cheque Books, No Transfer, No Clearing, No IMPS, No RTGS, No NEFT, No NACH, No Aadhaar credits, No Debit Card

C)     Funds out only to linked UPI Lite Wallet Accounts

D)    Funds in only through UPI including UPI Lite Refunds.

E)     Minimal Mobile Banking App to keep track of UPI Lite Wallets and transactions

Onboarding via Aadhaar OTP Authentication

KYC (Know Your Customer) Rule – Video KYC

Service Charges – INR0 to INR50/- per month excluding GST

Standard Product Code across all banks intending to offer UPI Lite Account i.e UPIL

Any credit from any source apart from UPI is rejected with reason ‘Credits Not allowed to UPIL Accounts’

As the popularity of UPI Lite Accounts spreads, credits from other sources will reduce

Standard Account Number Prefix: EX ABC Bank ABCUPIL____________  

 

FAQ’s

Q: Can customer have normal saving bank account and UPI Lite Account in the same bank.  

Ans: Yes, depending on the bank’s policies.

 

Benefits:

Benefit 01) Opportunity for banks to onboard new customers at minimum cost

Benefit 02) Opportunity for prospective customers to enjoy the benefits of UPI Payments

Benefit 03) Opportunity for the UPI Lite volumes to zoom up and up

Benefit 04) Opportunity for merchants to encourage all their customers to remit money via UPI only

Benefit 05) Opportunity for NPCI to showcase UPI Lite to other countries

Benefit 06) Opportunity for other countries to fine tune UPI Lite as per their local banking rules

Benefit 07) Opportunity for small tickets transactions to migrate from Card to UPI

 

Additional Reading Material:

NPCI Cir No 138 @ https://www.npci.org.in/PDF/npci/upi/circular/2022/UPI-OC-138-Introduction-of-On-Device-wallet-UPI-Lite-for-Small-Value-Transactions.pdf

 

UPI Lite Wallet-Based Offline Payments System Coming Soon From NPCI @

https://www.news18.com/news/tech/explained-upi-lite-wallet-based-offline-payments-system-coming-soon-from-npci-4889393.html

 

Disclaimer: These are my personal opinions only. The bottom line is Safe ePayments

 

 

 

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