Daily Current Affairs 6-December-2024

The Reserve Bank of India (RBI) recently made significant changes to UPI Lite, a digital payment solution designed for small-value transactions. The wallet limit has been raised from ₹2,000 to ₹5,000, and the transaction limit for offline payments has been increased from ₹500 to ₹1,000. These changes are expected to improve the ease and accessibility of digital payments for millions of users across India.

What is UPI Lite?

UPI Lite is a variant of the Unified Payments Interface (UPI), introduced in 2022 by the National Payments Corporation of India (NPCI). It aims to make digital payments faster, easier, and more convenient for small-value transactions. Unlike traditional UPI, which requires an active internet connection, UPI Lite supports partially offline payments, making it useful in areas with limited connectivity.

Key Features of UPI Lite
  • On-Device Wallet: UPI Lite stores funds directly on the user’s device, allowing for quick payments without needing to access a bank account every time.
  • Higher Wallet Limit: The wallet limit has now been increased to ₹5,000, providing more flexibility for users to store funds for everyday transactions.
  • Offline Payments: UPI Lite supports offline payments, where the debit is processed without the need for an internet connection, while the credit is updated online.
  • No UPI PIN: Unlike regular UPI, transactions through UPI Lite do not require a UPI PIN, making payments quicker and more convenient.
Comparison Between UPI Lite and UPI
AspectUPI LiteUPI
Transaction Limit₹1,000 per transaction₹2,00,000 per transaction (depending on the bank)
Wallet Limit₹5,000No wallet; linked to the bank account
Internet RequirementPartially offline (offline debit, online credit)Requires internet for all transactions
UPI PIN RequirementNot requiredMandatory for every transaction
PurposeSmall-value transactionsSuitable for all transaction values, including high-value payments
Benefits of UPI Lite
  • Convenience: The elimination of the UPI PIN requirement makes transactions faster, especially for small amounts.
  • Offline Capability: With the ability to perform transactions without internet access, UPI Lite is particularly beneficial in rural or low-connectivity areas.
  • Increased Limits: With higher wallet and transaction limits, users can store and spend more money without needing to access their main bank account.
Important Points

RBI’s New Changes to UPI Lite:

  • Wallet limit increased from ₹2,000 to ₹5,000.
  • Transaction limit for offline payments raised from ₹500 to ₹1,000.

What is UPI Lite?

  • Launched in 2022 by the National Payments Corporation of India (NPCI).
  • Aims to simplify small-value digital transactions.

Key Features of UPI Lite:

  • On-Device Wallet: Stores funds directly on the user’s device.
  • No UPI PIN Required: Simplifies and speeds up transactions.
  • Offline Payments: Supports offline debit and online credit payments.
  • Higher Limits: Wallet capacity is now ₹5,000, and transaction limit is ₹1,000 per transaction.

Comparison Between UPI Lite and UPI:

  • UPI Lite has a ₹1,000 transaction limit vs. UPI’s ₹2,00,000.
  • UPI Lite supports offline transactions; UPI requires an active internet connection.
  • UPI Lite doesn’t require a UPI PIN, while UPI does for every transaction.
  • UPI Lite is designed for small-value transactions, while UPI is for all transaction sizes.

Benefits of UPI Lite:

  • Faster Transactions: No UPI PIN required, making payments quicker.
  • Offline Functionality: Useful in areas with limited internet connectivity.
  • Increased Limits: Users can store up to ₹5,000, enhancing convenience for daily transactions.
Why In News

The Reserve Bank of India (RBI) has recently increased the wallet limit for UPI Lite from ₹2,000 to ₹5,000 and raised the transaction limit for offline payments from ₹500 to ₹1,000, aiming to enhance the convenience and accessibility of digital payments for users, especially in areas with limited internet connectivity. This move is expected to encourage more people to adopt UPI Lite for their everyday transactions, further promoting financial inclusion across the country.

MCQs about UPI Lite
  1. What changes did the RBI make to UPI Lite?
    A) Wallet limit ₹10,000, transaction ₹2,000
    B) Wallet limit ₹5,000, transaction ₹1,000
    C) Wallet limit ₹3,000, transaction ₹500
    D) Wallet limit ₹1,000, transaction ₹200
    Correct Answer: B) Wallet limit ₹5,000, transaction ₹1,000
    Explanation: The RBI raised the wallet limit for UPI Lite to ₹5,000 and the transaction limit for offline payments to ₹1,000 to enhance user convenience.
  2. Which is a key feature of UPI Lite?
    A) Requires UPI PIN
    B) Offline payments
    C) High-value transactions
    D) Requires internet
    Correct Answer: B) Offline payments
    Explanation: UPI Lite allows for offline payments, where the debit occurs offline and credit is processed online.
  3. How does UPI Lite’s transaction limit compare to UPI’s?
    A) UPI Lite has a higher limit
    B) UPI Lite: ₹1,000, UPI: ₹2,00,000
    C) No transaction limit for UPI Lite
    D) UPI has a lower limit
    Correct Answer: B) UPI Lite: ₹1,000, UPI: ₹2,00,000
    Explanation: UPI Lite has a transaction limit of ₹1,000 per transaction, while UPI allows transactions up to ₹2,00,000, depending on the bank.
  4. Why is no UPI PIN required for UPI Lite?
    A) Increases security
    B) Makes transactions faster
    C) Allows high-value transactions
    D) No internet needed
    Correct Answer: B) Makes transactions faster
    Explanation: Since no UPI PIN is needed, UPI Lite transactions are quicker, especially for small-value payments.

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