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RBI’s UPI move may boost innovation
April 10, 2023
Reserve Bank of India’s (RBI) latest move to enable Unified Payments Interface (UPI) payments from pre-sanctioned credit lines will pave the way for more innovation in credit products, say experts. These include various types of secured and unsecured products for the under-banked segment.
“Basically, we will be able to link secured and unsecured products to UPI and we can use it as a point of sale terminal. Also, buy-now, pay-later-like model with a pre-approved credit line can be made available to customers. It is a good thing for innovation,” Mihir Gandhi, partner – payments transformation, PwC India, said.
In its monetary policy statement on Thursday, the RBI proposed that the UPI network be enabled to facilitate payments financed by credit from banks. The central bank said it will shortly issue separate directions on this.
The latest move adds to the array of regulatory measures aimed at enhancing the adoption of UPI. Recently, the central bank permitted RuPay credit cards to be linked with UPI.
“I think banks is the first step, but they should also make it open to NBFCs going forward. Secondly, there is an opportunity for non-RuPay credit card networks to work with banks and offer credit lines that can be linked to UPI,” Gandhi said.
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