Current Affairs: Passage of the Day - 07 December 2024 | Current Affairs: Daily, Weekly & Monthly - CLAT PDF Download

Directions: Read the passage carefully and answer the questions that follow.
The Reserve Bank of India (RBI) has increased the transaction limit for offline digital payments through UPI Lite. The move can benefit many people, especially those who live in places with poor internet connectivity. UPI Lite transactions are offline in the sense that there is no need to enter a UPI PIN while making payments.
What is UPI Lite?
UPI Lite is designed to enable instant, low-value offline payments which form the bulk of retail payments made across India. Customers can use the replenishable balance to make cashless payments for any low-value item from Kirana stores, pharmacies, restaurants, shops, fuel retail outlets, and more. Moreover, customers will have an uncluttered passbook, as LITE transactions will not be captured in the bank passbook.
The initial framework, which was unveiled in January 2022 and revised in August 2023, was designed to make small-value digital payments easier to make offline payments. For low-value purchases, UPI Lite makes it possible to carry out transactions without internet connectivity, making payments quicker and easier.
Two UPI Lite transaction limits hiked
The RBI has hiked the per-transaction limits on UPI Lite from Rs 500 to Rs 1,000. The overall wallet limit of UPI Lite has also been raised from Rs 2,000 to Rs 5,000.
What are the benefits of UPI Lite?
UPI Lite provides round-the-clock availability for customers, better small-value payment management, and is also convenient to track. Single-click payments are possible using UPI Lite, and customers can manage their spends with daily limits and there is no worry of hiding UPI Pin in crowded places for small-value payments.
“The Reserve Bank of India's decision to increase the UPI Lite wallet limit to ₹5,000 and enhance the per-transaction limit to Rs 1,000 marks a significant milestone in fostering a more inclusive digital payment ecosystem. This move directly addresses the needs of individuals in regions with inconsistent internet access by enabling faster, more convenient offline transactions, particularly for small-value payments,” said Dilip Modi, Founder, and CEO, Spice Money.
Mohan K, Founder, TechFini, says, "The RBI's decision to increase the UPI Lite wallet limit to Rs 5,000 and the transaction cap to Rs 1,000 is likely to benefit consumers by enhancing convenience, speed, and accessibility in digital payments. With a higher wallet limit, users can store more funds, reducing the need for frequent top-ups and making small-value transactions quicker and easier. The Rs 1,000 transaction cap allows for faster payments without extensive verification, benefiting both consumers and merchants by streamlining the process."
Vishal Maru, Global Processing Head, FSS, says, "This recent decision by the Reserve Bank of India to increase the limits for UPI Lite marks a major step forward in promoting digital payments, especially among the rural population. With this increase in the wallet limit to Rs 5,000 and the per-transaction limit to Rs 1,000, we are indeed poised to address a long-standing challenge: ensuring hassle-free and reliable offline payments even in areas where internet connectivity remains patchy. This enhancement directly benefits over 65% of our population residing in rural regions and enables them to make essential transactions, such as buying groceries or paying for local services, hassle-free. The offline functionality of UPI Lite ensures that transaction failures due to poor connectivity are minimized and payment experiences are smooth and efficient."
How to create a UPI Lite account on Google Pay?
Step 1: Download and open the Google Pay app. UPI Lite is a sub category within the Google Pay app.
Step 2: At the top right, tap on your profile picture, click on UPI Lite tab
Step 3: Enter the amount you want to add.
Step 4: You can add up to Rs 5,000
Step 5: Enter your UPI PIN.
You can only create one UPI Lite account on Google Pay. Similarly, you can set up UPI accounts on other apps such as Paytm, PhonePe etc.
[Excerpt from The Economic Times "RBI Increases UPI Lite Wallet and Transaction Limits" Dated 07/12/24]

Q1: What is the new wallet limit for UPI Lite as announced by the RBI?
(a) ₹2,000
(b) ₹3,000
(c) ₹5,000
(d) ₹10,000

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Q2: What is the updated transaction limit for offline payments using UPI Lite?
(a) ₹500
(b) ₹750
(c) ₹1,000
(d) ₹2,000

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Q3: Under which act were the recent changes to UPI Lite made?
(a) Banking Regulation Act, 1949
(b) Payment and Settlement Systems Act, 2007
(c) Digital India Act, 2015
(d) RBI Act, 1934

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Q4: When did UPI achieve its highest recorded transactions in a single month, reaching 16.58 billion?
(a) September 2024
(b) October 2024
(c) November 2024
(d) December 2024

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Q5: What is one of the primary features of UPI Lite?
(a) Supports only large-value transactions
(b) Links multiple bank accounts to one mobile app
(c) Requires internet for every transaction
(d) Exclusive for merchant payments only

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