RBI Raises Transaction Limit For Small Value Payments In Offline Mode According to RBI, an offline payment means a transaction that does not require internet or telecom connectivity
By Teena Jose
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The Reserve Bank of India on Thursday enhanced the transaction limit for small-value digital payments in offline mode from INR 200 to INR 500 with effect from August 24.
In a meeting, RBI reportedly announced the development, "By removing the need for two-factor authentication for small value transactions, these channels enable faster, reliable, and contactless modes of payments for everyday small value payments, transit payments, etc. Since then, there have been demands for enhancing these limits. To encourage wider adoption of this mode of payments and bring in more use cases into this mode, it is now proposed to increase the per transaction limit to INR 500."
According to RBI notification, an offline payment means a transaction that does not require internet or telecom connectivity. The offline small-value digital payments can be made by either using the National Common Mobility Card or UPI Lite.
However, it also stated that the total limit for offline transactions on a payment instrument remains INR 2,000 at any point in time.
The new initiative mainly aims to promote the use of UPI-Lite wallet in areas where internet connectivity is weak or not available. To increase the speed of small-value transactions on UPI, an on-device wallet called UPI-Lite was launched in September 2022 to optimise processing resources for banks, thereby reducing transaction failures.
Earlier this month, the RBI had also proposed to facilitate offline transactions using Near Field Communication (NFC) technology to promote the use of UPI-Lite. Transactions through NFC do not require PIN verification.
