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RBI Pressing For Wider Adoption Of UPI-Like Credit Platform For Farmers, MSMEs

Inc42 · 1y ago

RBI Pressing For Wider Adoption Of UPI-Like Credit Platform For Farmers, MSMEs

The Reserve Bank of India (RBI) is promoting the adoption of an open-source credit disbursal platform, similar to the Unified Payments Interface, to simplify credit access for farmers and small business owners. The Public Tech Platform for Frictionless Credit (PTPFC) aims to streamline the process for obtaining agricultural loans and Kisan credit cards. The platform facilitates connections between lenders, startups, and borrowers, with the goal of meeting the increasing demand for formal credit. Successful pilots have already been conducted in specific districts, resulting in INR 3,500 crore ($466 million) worth of loans disbursed.

Related News

NPCI Planning Lower Interchange Fee To Boost Credit Use On UPI

Inc42 · 1y ago

NPCI Planning Lower Interchange Fee To Boost Credit Use On UPI

The National Payments Corporation of India (NPCI) is considering a lower interchange fee for credit lines on the Unified Payment Interface (UPI) in an effort to promote their adoption. The current interchange fee for credit card transactions is around 1.8%-2%, but the NPCI is exploring a fee ranging between 1%-1.2% for credit lines on UPI. Banks and fintech apps like Paytm and Google Pay are ready to offer credit lines on UPI, but are waiting for clarity on the interchange fee. The RBI approved credit lines on UPI in September 2020.

ETtech Explainer: All you need to know about Unified Lending Interface (ULI)

Economic Times

Economic Times · 1y ago

ETtech Explainer: All you need to know about Unified Lending Interface (ULI)

The Reserve Bank of India (RBI) is set to launch the Unified Lending Interface (ULI) to transform the lending landscape in the country. ULI, designed by the RBI Innovation Hub, aims to streamline the flow of digital information between data service providers and lenders, facilitating faster credit appraisal and delivery. This platform will help address the unmet credit demand in sectors like agriculture and MSMEs, by digitizing access to customer data that is currently scattered across various entities. The RBI governor believes ULI will have a transformative impact, similar to the success of the Unified Payments Interface (UPI) in the payments space.

RBI To Roll Out Unified Lending Interface To Offer Credit To Agricultural & MSME Borrowers

Inc42 · 1y ago

RBI To Roll Out Unified Lending Interface To Offer Credit To Agricultural & MSME Borrowers

The RBI is set to launch the 'Unified Lending Interface (ULI)' across India to address the credit needs of sectors such as agriculture and MSMEs. The ULI, which was tested last year, aims to speed up credit appraisal and enable the digital exchange of information. RBI Governor Shaktikanta Das believes that ULI has the potential to transform lending in India, similar to how the Unified Payments Interface (UPI) revolutionized the payment ecosystem.

RBI increases collateral free loan limit for farmers from ₹1.6 lakh to ₹2 lakh

Livemint

Livemint · 8m ago

RBI increases collateral free loan limit for farmers from ₹1.6 lakh to ₹2 lakh

The Reserve Bank of India (RBI) has increased the limit for collateral-free loans for agricultural farmers from ₹1.66 lakh to ₹2 lakh per borrower. This move is expected to provide relief to small and marginal farmers. The collateral-free loans do not require farmers to pledge assets as security. The RBI last revised the limit for these loans in 2019, raising it from ₹1 lakh to ₹1.6 lakh. The Kisan Credit Card (KCC) Scheme, which offers easy credit access for farmers, will also be enhanced through this update.

Digital payment sees over 65,000 crore transactions amounting to Rs 12,000 lakh crore in 6 years - The Economic Times

Economic Times

Economic Times · 1m ago

Digital payment sees over 65,000 crore transactions amounting to Rs 12,000 lakh crore in 6 years - The Economic Times

Over the past six financial years, India's digital payment landscape has seen over 65,000 crore transactions, amounting to more than Rs 12,000 lakh crore. The government, alongside the RBI, NPCI, fintechs, banks, and state governments, has worked to boost digital payment adoption in tier-II and III cities. Furthermore, a new Digital Credit Assessment Model for MSMEs has been launched, enhancing credit evaluations through digital data. India's foreign exchange reserves remain robust at $668.3 billion as of March 2025.

FY24 Sees Slowest Point of Sale Growth Since Demonetisation

Inc42 · 1y ago

FY24 Sees Slowest Point of Sale Growth Since Demonetisation

In March, there was a 32% decrease in debit card transactions at merchant outlets compared to the previous year. However, the adoption of QR codes and UPI payments through platforms like PhonePe, Google Pay, and Paytm has doubled in the past two years. The deployment of new Point of Sale (PoS) terminals increased by 14% between March 2023 and 2024. The government's mandate for zero Merchant Discount Rate (MDR) is encouraging merchants to shift to UPI payments. The number of credit cards issued in India has surpassed 100 million. RBI has issued draft rules to regulate point-of-sale payment service providers.

UPI Lite and wallet-based pay off to a slow start on zero-MDR bottleneck

Economic Times

Economic Times · 3m ago

UPI Lite and wallet-based pay off to a slow start on zero-MDR bottleneck

The National Payments Corporation of India's (NPCI) initiatives like UPI Lite, wallet-based payments, and UPI through RuPay credit cards aim to ease the banking system's load for small transactions. Yet, only recurring payments and credit cards via UPI have gained traction, while others struggle due to limited awareness and adoption. Barriers include the zero merchant discount rate, unresolved interchange rates for wallet-based UPI, and the high costs for banks to implement these new features without assured return on investment.

RBI to allow small finance banks to extend credit lines through UPI

YourStory

YourStory · 8m ago

RBI to allow small finance banks to extend credit lines through UPI

The Reserve Bank of India (RBI) has proposed allowing small finance banks (SFBs) to extend pre-sanctioned credit lines through the Unified Payments Interface (UPI). UPI is a real-time payment system developed for mobile transactions. This move aims to make low-ticket, low-tenor products accessible to new-to-credit customers. SFBs, with their high-tech, low-cost model, can play a crucial role in expanding the reach of credit on UPI, according to RBI Governor Shaktikanta Das. The RBI also plans to launch podcasts as part of its efforts to increase transparency and disseminate information to the public.

Linking RuPay credit cards to UPI: What you need to know

Money Control

Money Control · 1y ago

Linking RuPay credit cards to UPI: What you need to know

Linking your credit card to UPI allows you to spend smaller amounts through your credit card. RBI allowed RuPay credit cards to be linked to UPI in June 2022, resulting in significant growth in the number of credit cards issued. HDFC MoneyBack Plus Credit Card, ICICI Coral credit card, SBI SimplySAVE credit are some popular credit cards that can be linked to UPI.

Banks wary of UPI credit even as fintech firms make big plans

Economic Times

Economic Times · 1y ago

Banks wary of UPI credit even as fintech firms make big plans

Fintech companies like Freo, Jupiter, and PayU are exploring the possibility of offering credit card-like payment experience for consumers on the Unified Payments Interface (UPI) platform. While fintechs are hopeful about a credit line on UPI, banks are being cautious due to the Reserve Bank of India's warnings about unsecured lending. The activation of a credit line on UPI would allow consumers to use UPI for payments and access the credit line for later payment conversion. However, there are concerns about customers becoming overleveraged and challenges surrounding loan collection.

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