The Reserve Bank of India (RBI) has announced the extension of the credit line linked to the Unified Payments Interface (UPI) to small finance banks. This move aims to enhance financial inclusion by allowing more institutions to offer this facility.

The UPI credit line, which was launched in September 2023, enables users to access instant credit through popular apps like BHIM, PayZapp, Paytm, and GPay. This pre-sanctioned credit limit allows customers to make purchases using UPI without relying solely on their account funds. The RBI highlighted that this initiative will particularly benefit 'new-to-credit' customers and those banking with smaller institutions, making it easier for them to access credit in small towns and rural areas.

Adhil Shetty, CEO of Bankbazaar.com, stated that this development is expected to significantly boost financial inclusion by providing convenient credit facilities to a wider audience.