A major decision was taken for UPI users today in the meeting of the Monetary Policy Committee (MPC). RBI Governor Shaktikanta Das said that now UPI users will also be given facility like credit card. Your UPI account will now function as an overdraft facility. Where you will be able to spend even without money.
New Delhi. Reserve Bank Governor Shaktikant Das made a big announcement on Thursday to promote digital payments and make options like Unified Payment Interface (UPI) more attractive. After the Monetary Policy Committee (MPC) meeting, the governor said that now users will get credit card-like facilities on UPI as well. Pre-sanctioned amount will be given to the users by the banks, which can be used even if there is no money in the account.
Governor Das told that transactions through UPI are increasing rapidly in the country. Many decisions have been taken to make it more popular among the people and to provide more convenience to the users. Users who make UPI payments through apps like Paytm, PhonePe or Google Pay will now be given a pre-approved credit line.
This amount will be decided by the banks or financial institutions. Users will be able to use this amount even when there is no money in their account. The governor said that this initiative of RBI will further encourage innovation.
What is credit line and how will it work
Credit line will be the limit fixed by the bank for any users, the amount that the user will be able to spend. Banks and financial institutions will prepare this credit line by assessing the user’s income and ability to repay the loan.
In a way, facility like overdraft will also be given on UPI. Where a customer will use this amount on need and then return this amount with interest. It is clear that in lieu of this facility, banks will charge some interest from you. Banks will prepare pre-approved credit lines only after assessing the risk capability of each customer.
Will be able to link credit card with UPI
The governor said that today maximum payments are being made through UPI in India. It has completely changed the way retail transactions are done. Banks have also taken advantage of the strength of UPI to develop their own products and features. In the MPC meeting, permission has also been given to link credit cards with UPI. At present, users will be able to link RuPay Credit Card with UPI.
If you look at the statistics of the National Payments Corporation of India (NPCI), then a total of 8.7 billion transactions were done through UPI and it is increasing by 60 percent on an annual basis . If we look at the data of the last 12 months, on an average 36 crore transactions have been done through UPI every day. This figure is 50 percent more than the 24 crore transactions done in February 2022.
