Centre clears Rs. 2600 crore incentive scheme to promote Rupay, BHIM-UPI.   

Why in news?

• Scheme aims to promote RuPay Debit Cards and low-value BHIM-UPI transactions (person-to-merchant) in FY 2022-23.

Features of scheme

• Banks would be provided financial incentives for promoting Point of Sale (PoS) and e-commerce transactions using RuPay and UPI.
• Promote UPI Lite and UPI 123PAY as economical and user-friendly digital payments solutions.
  • UPI Lite is an ‘on-device wallet’ feature by National Payments Corporation of India (NPCI) to allow users to make small-value payments (upto 1200) offline.
  • UPI 123PAY is an instant payment system for feature phone (non-smartphone) users.
• In addition, NPCI has allowed Non-Resident Indians (NRIs) with NRE (non-resident external) or NRO (non-resident ordinary) accounts in 10 countries to use UPI platform from their international mobile numbers.
• Member banks have to ensure such types of accounts are only allowed as per extant Foreign Exchange Management Act regulations and RBI rules.
• 10 countries are Singapore, Australia, Canada, Hongkong, Oman, Qatar, USA, Saudi Arabia, UAE, and United Kingdom.
• UPI works on principle of SIM binding for security purposes and till now, it was enabled only for Indian mobile numbers.
  • NRIs demanded enabling UPI on international SIM cards for ease of payment and avoiding use of expensive international cards.

Other information

• UPI is a real-time payment system, launched in 2016 by NPCI. It links multiple bank accounts into a single mobile application.
• NPCI is an initiative of RBI and Indian Banks Association under Payment and Settlement Systems Act, 2007. It is an umbrella organization for operating retail payments and settlement systems in India.
• NRE account helps NRIs transfer foreign earnings to India, while an NRO account helps them to manage income earned in India.