RBI Announces UPI Lite E-mandate: A New Step in Simplifying Digital Payments

The Reserve Bank of India (RBI) has recently integrated UPI Lite with its e-mandate framework, marking a significant development in enhancing the ease and efficiency of small-value digital transactions. This integration is set to revolutionize the way customers use UPI Lite, offering automatic balance replenishment without additional authentication steps.

Understanding UPI Lite and the E-Mandate

UPI Lite was introduced in September 2022 by the National Payments Corporation of India (NPCI). It is designed as an on-device wallet that facilitates quick and seamless transactions for amounts up to Rs 2,000, with each transaction capped at Rs 500. This system was primarily tailored for smaller, frequent transactions to speed up the process without the need for a UPI PIN.

The recent announcement by RBI Governor Shaktikanta Das during the monetary policy committee meeting highlights the new feature of auto-replenishment. Once a user’s UPI Lite balance falls below a set threshold, it will automatically refill by drawing funds from the user’s linked bank account​.

How Does Auto-Replenishment Work?

The auto-replenishment feature is straightforward:

1. Users set a threshold limit for their UPI Lite balance.
2. If the balance drops below this limit, the wallet is automatically refilled with the predefined amount from the user’s bank account.
3. This process occurs without the need for additional authentication or pre-debit notifications, simplifying the transaction process and enhancing user convenience​.

Benefits of UPI Lite E-Mandate Integration

This new functionality is expected to be particularly beneficial for users in remote or rural areas, where internet connectivity can be inconsistent. With auto-replenishment, users can ensure their wallets are always funded, ready for transactions at any time.

Furthermore, the integration of UPI Lite into the e-mandate framework is expected to broaden its usage across various payment scenarios, including those without fixed periodicity, like toll payments (via FASTag) and transit payments (via the National Common Mobility Card or NCMC). This adjustment aims to streamline and secure repeated transactions across different sectors​.