The Reserve Bank of India (RBI) has lifted the limit of the UPI Lite wallet to Rs 5,000 from existing Rs 2,000.

The per-transaction limit has also been increased to Rs 1,000 from Rs 500. 

Both these moves are expected to encourage wider adoption of the popular instant payment system through mobile phones.

UPI Lite wallet is aimed at small-value transactions. It facilitates transactions directly from the wallet without requiring bank authorisation for each transaction.

"UPI has transformed India’s financial landscape by making digital payments accessible and inclusive through continuous innovation and adaptation. To further encourage wider adoption of UPI and make it more inclusive, it has been decided to increase the UPI Lite wallet limit from Rs 2,000 to Rs 5,000 and per-transaction limit from Rs 500 to Rs 1,000," said RBI Governor Shaktikanta Das, while announcing the October bi-monthly monetary policy.

Das also said the per-transaction limit in UPI123Pay will be enhanced to Rs 10,000 from the current Rs 5,000. The aim is to enable larger transactions and provide more flexibility for users.

The UPI123Pay facility is mainly for people using non-smart phone/feature phones, who wish to make digital payments via Unified Payment Interface (UPI) but lack internet connectivity. 

UPI123 was launched in March 2022, with a view to enable feature-phone users to use UPI. This facility is now available in 12 languages.

In another customer-friendly initiative, Das announced a beneficiary account name look-up facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems will be introduced.

Payment Systems like UPI and IMPS provide a facility to the remitter to verify the name of the receiver (beneficiary) before initiating a payment transaction.

There have been requests to introduce such a facility for RTGS and NEFT systems, the Governor said.

"Accordingly, to enable remitters in RTGS and NEFT to verify the name of the beneficiary account holder before initiating funds transfer, it is now proposed to introduce a ‘beneficiary account name look-up facility’," he said.

Remitters can input the account number and the branch IFSC code of the beneficiary, following which the name of the beneficiary will be displayed.

This facility will increase customer confidence as it would reduce the possibility of wrong credits and frauds, Das said.