Visits to the bank and queues for withdrawing cash were first replaced by ATMs and now digital money has allowed Indians to do away with withdrawals entirely. But beyond payments, banking includes essential services such as loans which increase the purchasing power among Indians.
After hitting the milestone of facilitating 36 crore transactions a day, the Unified Payments Interface may soon provide quick credit for consumers.
Loans sanctioned in advance
Buy now pay later apps, which allow users to pay for purchases in four or more installments, will be accessible for Indians through UPI after the proposed update.
The payment system behind 75 per cent e-payments in India, is already on track to be linked with the RuPay credit card.
The loans offered through UPI will be pre-sanctioned by banks, according to the Reserve Bank of India's proposal.
Splurging on big purchases to become easier
After the changes, users can seamlessly get micro-credit for big purchases and pay for them in parts, without having to visit a bank for the application process.
The proposal will be followed by detailed instructions by the RBI on the new bank-backed credit line.
With big brands, high-end electronics and apparel accessible via e-commerce, the fast credit via UPI will give Indians the freedom to splurge more.
The easy access to EMI-based purchases with a few taps will also increase cashflow significantly, paving the way for economic growth in India.
Steps to make loans easily and quickly accessible also come after household debt surged by Rs 6 trillion in 2021-22.