The Reserve Bank of India (RBI) has approved a new facility that will allow users to access small loans directly through UPI (Unified Payments Interface). With the introduction of credit line on UPI, customers will no longer have to visit banks or go through lengthy paperwork for availing short-term credit. This move is expected to transform the digital lending ecosystem and make credit more accessible, faster, and convenient for millions of Indians.
RBI Greenlights Credit Line on UPI
RBI has issued guidelines for banks and financial institutions, enabling them to extend credit lines directly on UPI platforms. This means that users can now use UPI not only for transferring money and making payments but also for borrowing loans instantly. The facility is aimed at bringing more financial inclusion and easing the process of obtaining small-ticket loans.
Types of Loans Available
Through this new system, individuals will be able to access gold loans, personal loans, and consumer loans via UPI. Once approved, the borrowed amount can be directly used to make payments through UPI apps such as PhonePe, Paytm, Google Pay, or BHIM. This eliminates the traditional dependency on physical bank branches for loan disbursal.
Benefits for Customers and Businesses
The integration of loans with UPI is a significant step in digital banking innovation. Customers benefit from:
- Instant loan approval and usage
- No need for visiting banks
- Seamless repayment through UPI
For small businesses and merchants, this development will provide quick access to working capital, ensuring smooth business operations.
Boost to Digital Lending
India is already a global leader in UPI transactions, with billions of digital payments processed monthly. By enabling credit access on UPI, RBI aims to strengthen digital lending and empower both urban and rural populations with faster, hassle-free credit facilities.
