Major Update in UPI Lite: Fund Withdrawal Now Possible
UPI Lite has become a widely used digital payment solution in India, allowing users to make small transactions without requiring a UPI PIN. To enhance user convenience, the National Payments Corporation of India (NPCI) has introduced a significant update to the UPI Lite rules.
Under these revised guidelines, users will now be able to withdraw funds from their UPI Lite wallet and transfer them back to their source bank account. This new feature will officially come into effect on April 1, 2025. Currently, there is no provision to transfer the remaining balance in a UPI Lite wallet back to the bank account without deactivating the Lite account.
One-Way Transfer Restriction Removed
At present, UPI Lite only supports one-way fund transfers, meaning users can load money into the wallet from their bank account but cannot move it back. To reclaim their balance, they must deactivate their UPI Lite account. However, with the introduction of the “Transfer Out” feature, users will now have the flexibility to transfer funds back to their source bank account with a simple click. This update will eliminate the hassle of account deactivation for fund retrieval.
NPCI Directs Banks to Implement New Feature
To ensure a smooth rollout, NPCI has issued a circular instructing all banks, payment service providers, and platforms offering UPI Lite to implement the “Transfer Out” facility. The deadline for the implementation of this new feature is set for March 31, 2025.
RBI’s Previous Changes to UPI Lite
In December 2024, the Reserve Bank of India (RBI) also made crucial amendments to UPI Lite rules. The transaction and wallet limits were increased, enhancing the overall user experience. The maximum wallet capacity was raised from ₹2,000 to ₹5,000, while the per-transaction limit was doubled from ₹500 to ₹1,000.
These continuous improvements in UPI Lite ensure a more user-friendly and flexible digital payment system, making small-value transactions even more efficient and seamless.
