RBI allows digital transactions of up to Rs 200 in offline mode

The Reserve Bank of India (RBI) on Monday, to push digital transactions in rural and semi-urban areas, issued a framework allowing small payments in offline mode up to Rs 200 per transaction.

An offline digital payment is a transaction which does not require internet or telecom connectivity.

"Transactions are subject to a limit of Rs 200 per transaction and an overall limit of Rs 2,000 for all transactions until the balance in the account is replenished. Balance replenishment can only occur in an online mode," according to the framework released by the RBI.

Since the transactions are offline, alerts by way of SMS and/ or e-mail will be received by the customer after a time lag. Offline payments can be made using any channel or instrument like cards, wallets, and mobile devices.

Under the offline mode, transactions will not require an additional factor of authentication (AFA) and can be carried out via face-to-face (proximity) mode using any channel or instrument.

"Offline payments shall be made in proximity (face-to-face) mode only," it said, adding that such transactions may be offered without AFA. Besides, such transactions using cards should be allowed without a requirement to switch on the contactless transaction channel.

The framework has also incorporated the feedback received from the pilot experiments on offline transactions conducted in different parts of India from September 2020 to June 2021, the RBI said.

"Offline transactions are expected to give a push to digital transactions in areas with poor or weak internet or telecom connectivity, particularly in semi-urban and rural areas. The new framework is applicable with immediate effect," it added. The offline mode of payment can be enabled after obtaining the specific consent of the customer, it said.

The central bank also said that the customers will continue to enjoy protection under the provisions of circulars limiting customer liability and will have recourse to the Reserve Bank Integrated Ombudsman Scheme for grievance redress.

Further, the acquirer should incur all liabilities arising out of technical or transaction security issues at the merchant's end. The RBI also emphasised that offline payments will be covered under the provisions of its limited customer liability circulars.