UPI Lite to Allow Withdrawals & Transfers to Bank Accounts Soon

The National Payments Corporation of India (NPCI) has asked issuer banks, PSB banks and others that provide UPI Lite service to switch on the transfer out feature by 31 March.

UPI Lite works unidirectionally in the sense that while users can cred it funds into their wallets, they cannot withdraw. To access the balance available, users have to turn off their UPI Lite account. As described on NPCI’s website, “Upon clicking the disable button on UPI Lite, the balance funds available in the Lite account with the bank shall be released to the user’s account."

What is UPI Lite

UPI Lite permits users to carry out small-value transactions without requiring a UPI PIN. The payment service processes low value transactions, which are capped to below Rs 500, using the NPCI Common Library (CL) application.

New Features in UPI LITE As of September 2023 Changes in the recorder centralization super vision. All Issuer Banks operating on UPI Lite must maintain Lite Reference Number (LRN) level balances on all Issuer UPI LITE accounts and perform reconciliation with NPCI data every day. By this step, monitoring and recording transactions will become much easier and simpler.

With withdrawal enabled, 'transfer out' functionality added: Users can now withdraw funds from their UPI LITE balance and transfer the funds back to the source bank account without disabling UPI LITE.

Strengthened security measures: UPI Apps With Active UPI LITE Account will now be required to have an app passcode, biometric authentication or a pattern based lock at the time of login to the UPI Lite account.

When Must These Changes Be Complied By? NPCI has instructed all participants and stakeholders to comply by March 2025 so that all participants can adopt these changes into the UPI ecosystem. All amends concerning UPI Lite will follow the standard procedure without changes to the pre-existing guidelines.

How to Enable UPI LITE Open your preferred UPI app. There will be a prompt on the home page to enable UPI LITE feature. Read and accept the terms and conditions, and you are all set to go.

Specify the value that needs to be added to UPI LITE.

Select the bank account that is already linked to the platform.

For completion authentication, input your UPI PIN.

When it is finished, you will successfully activate UPI LITE which allows low-cost trades without requiring a UPI PIN.