RBI Finalises Framework for Offline Small Value Digital Payments
No longer current — withdrawn, no replacement on file yet
RBI's own words: “5. Small value digital payments in offline mode CO.DPSS.POLC.No.S1264/02-14-003/2021-2022 dated January 03, 2022” — RBI/2025-26/79
Source: Reserve Bank of India · RBI/2021-22/146 · issued 03 Jan 2022 · ~2 min read
Quick answerRBI has formalised a framework for small value digital payments in offline mode, allowing transactions up to ₹500 per payment and ₹2,000 total per instrument without internet or AFA, effective immediately for authorised PSOs and PSPs.
The rule, in the simplest words
You can pay up to ₹500 (five hundred rupees) in one offline payment without needing internet or a password (AFA).
Your total offline payments on one card or wallet cannot be more than ₹2,000 (two thousand rupees) at any time.
For UPI Lite (a special digital wallet), you can pay up to ₹1,000 per transaction and keep up to ₹5,000 total.
You must say 'yes' (give explicit consent) before your card or wallet is allowed to work offline.
Offline payments only work when you are face-to-face (proximity) with the merchant, not online or over the phone.
How it plays out — a real example
Ravi, a payments & clearing officer in Indore, uses his bank's offline wallet to accept ₹200 from a farmer for a document fee. Since the farmer's wallet has offline consent enabled, Ravi taps his phone to the farmer's phone—no internet needed—and the payment goes through instantly. Later, Ravi checks the transaction alert on his own phone to confirm the money arrived.
What changed
RBI moved from a pilot scheme (August 2020) to a permanent framework for offline digital payments, based on successful testing from September 2020 to July 2021. The framework sets transaction limits of ₹500 per payment and ₹2,000 total per instrument, with higher limits for UPI Lite (₹1,000 per transaction, ₹5,000 total). Offline payments are proximity-only, require explicit customer consent, and do not need AFA.
What it means for you
Banks and payment operators can now offer offline digital payment solutions using cards, wallets, or mobile devices, expanding reach in areas with poor connectivity. Issuers must send transaction alerts and ensure replenishment of limits only online with AFA. Acquirers bear liability for technical or security issues at merchant end, and all transactions fall under RBI's limited customer liability rules.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Ensure compliance with the framework for offline payments, including transaction limits of ₹500 per payment and ₹2,000 total per instrument.
Obtain explicit customer consent before enabling offline payment capability on any instrument.
Set up systems to send transaction alerts to users and convey details of each transaction adequately.
For UPI Lite, implement enhanced limits of ₹1,000 per transaction and ₹5,000 total, with online-only replenishment using AFA.
Prepare to handle customer grievances under the RBI Integrated Ombudsman Scheme and accept liability for merchant-end issues.
Who it affects
Authorised Payment System Operators (PSOs), Payment System Participants (PSPs) including banks and non-banks, Issuers and acquirers of cards, wallets, and mobile payment instruments, Merchants accepting offline digital payments, Customers using offline payment solutions
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the maximum transaction limit for offline digital payments under this framework?
The upper limit per offline payment transaction is ₹500, with a total limit of ₹2,000 on a payment instrument at any point in time. For UPI Lite, the limits are enhanced to ₹1,000 per transaction and ₹5,000 total.
Is Additional Factor of Authentication (AFA) required for offline payments?
No, offline payment transactions may be offered without AFA. However, replenishment of used limits must be done only in online mode with AFA.
Who bears liability for technical or security issues at the merchant's end?
The acquirer shall incur all liabilities arising out of technical or transaction security issues at the merchant's end.
📜 This document’s life story (3 recorded events, each backed by RBI’s own words)
RBI’s words: “This has reference to the RBI circular CO.DPSS.POLC.No.S1264/02-14-003/2021-2022 dated January 03, 2022”
Repealed byRBI/2025-26/79 — Master Directions
RBI’s words: “5. Small value digital payments in offline mode CO.DPSS.POLC.No.S1264/02-14-003/2021-2022 dated January 03, 2022”
📜 Read the original circular — full text as issued by RBI
RBI/2021-22/146
CO.DPSS.POLC.No.S1264/02-14-003/2021-2022
January 03, 2022
( Updated as on December 04, 2024 )
(Updated as on August 24, 2023)
The Chairman / Managing Director / Chief Executive Officer
Authorised Payment System Operators and Participants (Banks and Non-banks)
Madam / Dear Sir,
Framework for Facilitating Small Value Digital Payments in Offline Mode
Reserve Bank had, vide circular dated August 06, 2020 , permitted a pilot scheme to encourage technological innovations that enable small value digital transactions in offline mode. It was stated therein that the decision on formalising such a system would be based on the experience gained.
2. Pilot testing was undertaken by some entities during the period from September 2020 to July 2021. With encouraging feedback from the pilots, it was announced in the Statement on Developmental and Regulatory policies dated October 08, 2021 , that a framework for carrying out small value digital payments in offline mode across the country would be introduced.
3. Accordingly, the framework to enable small value digital payments in offline mode using cards, wallets, mobile devices, etc., is detailed in Annex . Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) – Acquirers and Issuers (banks and non-banks) - shall ensure compliance with all the applicable instructions.
4. This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect immediately.
Yours faithfully,
(P Vasudevan)
Chief General Manager
Annex
CO.DPSS.POLC.No.S1264/02-14-003/2021-2022 dated January 03, 2022
An offline payment means a transaction which does not require internet or telecom connectivity to take effect. Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) – Acquirers and Issuers (banks and non-banks) – desirous to provide / enable payment solutions that facilitate small value digital payments in offline mode shall comply with the following requirements:
Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
Offline payments shall be made in proximity (face to face) mode only.
Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of terms of DPSS circular no. DPSS.CO.PD no.1343/02.14.003/2019-20 dated January 15, 2020 on Enhancing Security of Card Transactions.
The upper limit of an offline payment transaction shall be ₹500. The total limit for offline transactions on a payment instrument shall be ₹2,000 at any point in time. For UPI Lite 1 , the enhanced limits shall be ₹1,000 per transaction with ₹5,000 being the total limit. Replenishment of used limit shall be allowed only in online mode with AFA.
The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction; however, details of each transaction shall be adequately conveyed.
The acquirer shall incur all liabilities arising out of technical or transaction security issues at merchant’s end.
Offline payments shall be covered under the provisions of RBI’s limited customer liability circulars (as amended from time to time) - DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 06, 2017 ; DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017 and para 17 of Master Direction on Prepaid Payment Instruments dated August 27, 2021 .
The customers shall have recourse to the Reserve Bank – Integrated Ombudsman Scheme , as applicable, for grievance redressal.
Reserve Bank retains the right to stop or modify the operations of any such payment solution that enables small value digital payments in offline mode.
1 UPI Lite transaction is offline to the extent that AFA is not required, and transaction alerts not sent in real time.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/146 · issued 03 Jan 2022. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12215&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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