The Reserve Bank on Thursday proposed to expand the scope of the Unified Payments Interface (UPI) by including pre-sanctioned credit lines at banks within the ambit of the popular payment platform.
UPI is a robust payment platform supporting an array of features. Presently it handles 75 per cent of the retail digital payments volume in India.
The UPI system has been leveraged to develop products and features aligned to India’s payments digitisation goals, said RBI Governor Shaktikanta Das while announcing the bi-monthly monetary
policy.
In other words, UPI network will facilitate payments financed by credit from banks. This can reduce the cost of such offerings and help in the development of unique products for Indian markets.
At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.
The central bank will soon issue detailed instructions in this regard.
Recently, RuPay credit cards were permitted to be linked to UPI.
Commenting on the announcement, A K Goel, Chairman of the Indian Banks’ Association (IBA), said expanding the scope of UPI to include pre-sanctioned credit lines at banks is aimed at increasing the coverage of UPI and also increasing the access to institutional credit as UPI is quite popular among the public.
Anand Kumar Bajaj, Founder, MD & CEO, PayNearby said the fast pace evolution of technology is playing a huge role in presenting a great opportunity to solve the broken pieces, fill the gaps and reach inclusion faster.