Reserve Bank of India (RBI) Governor Shaktikanta Das launched three initiatives by the National Payments Corporation of India (NPCI) at the Global Fintech Fest 2022 in Mumbai on September 20.
The initiatives that were announced earlier by the RBI during previous monetary policy announcements include RuPay Credit Card on UPI, UPI LITE, and Bharat BillPay Cross-Border Bill Payments.
Infosys Non-Executive Chairman and advisor to NPCI Nandan Nilekani and NPCI Chairman Biswamohan Mahapatra were also present at the launch where a demo of the three initiatives was showcased for the first time.
Until now, only debit cards were allowed to be linked with UPI. With the linkage of RuPay Credit Card on UPI, customers will have an additional option to use their credit cards, and merchants will benefit from the increase in consumption by being part of the credit ecosystem with the acceptance of credit cards using assets like QR codes.
RuPay Credit Cards will be linked to a Virtual Payment Address (VPA) i.e. UPI ID, thus directly enabling secure payment transactions. The initial phase of operationalisation will be centred on extracting actionable learnings that would be used to fine-tune the proposition in later phases to scale up the usage, NPCI said.
Customers of Punjab National Bank, Union Bank of India, and Indian Bank will be the first to be able to use RuPay Credit Card on UPI with BHIM App.
UPI Lite will provide users with a convenient solution for faster and simpler low-value transactions. At present, 50 percent of UPI payments are below Rs 200. With UPI Lite enabled on BHIM App, users will be able to make small-value transactions in a near-offline mode by loading up to Rs 2,000 in their on-device wallets. Transactions up to Rs 200 can be made through UPI Lite.
UPI Lite is expected to reduce the debit load on the core banking system, thereby improving the success rate of transactions further, and enhancing the user experience.
"The launches today will democratise UPI further. Today we have about 260 million using UPI. With UPI Lite, combined with UPI123 Pay (UPI for feature phones) we can add another 500 million people to the payments system," Nilekani said.
NPCI said that eight banks are live with the feature including Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India Union Bank of India and Utkarsh Small Finance Bank.
Further, Bharat BillPay Cross-Border Bill Payments will make bill payments easier for people residing out of India but also maintaining a house in India. With more than 30 million Indians staying abroad, India is one of the top 5 biggest recipients of inward remittances.
Bharat BillPay Cross-Border Bill Payments facility will enable Non-Resident Indians (NRIs) to undertake utility, water, and telephone-related bill payments on behalf of their families in India. Federal Bank with UAE’s Lulu Exchange will be the first to go live with Bharat BillPay Cross-Border Bill Payments, NPCI added.
While addressing the event, the RBI Governor assured fintechs that the central bank will support innovation.
Das’ comments come in the backdrop of the RBI’s recently announced digital lending norms. Under the norms released by RBI on August 10, all loan disbursals and repayments through the digital lending apps are to be executed only between the bank accounts of the borrower and the regulated entity without any pass-through or pool account of the LSP or any third party.
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