NEW DELHIU: Some of the banks, including ICICI Bank, Axis Bank, State Bank of India (SBI), and Punjab National Bank, have already begun utilizing the UPI credit line product on a pilot basis, Ajay Kumar Chaudhary, Chairman of the National Payments Corporation of India said Thursday on the sidelines of an event organised by trade body ASSOCHAM.
Many more banks are also in the process of implementing this, as per Chaudhary.
"UPI credit line is currently primarily being offered by banks to individuals. There is significant excitement surrounding the UPI credit line, with notable growth in this area. NPCI is actively working to raise awareness about this," Chaudhary stated.
A UPI credit line is essentially a pre-approved loan available to customers who have a bank account linked to their UPI account.
This credit facility may offer various products from different banks participating in the UPI platform. It is more or less like a credit card payment, under which, a user can make the repayment of a loan with interest at a later date. To get this facility, the users of UPI will have to apply to the banks. There are many benefits of borrowing through UPI credit lines, as it is more flexible and there is no need to carry a physical card. In addition to this, there is also no requirement for POS or swipe machines to facilitate credit transactions.
Regarding the increasing financial frauds, Chaudhary highlighted that significant efforts are underway to combat and prevent such fraudulent activities.
"Multiple work is being done by RBI as well as other regulators on fraud detection side. NPCI is also working on payment side to leverage AI/ ML to facilitate understanding of pattern and help banks in identification of frauds," he stated.