Non-banking finance companies (NBFCs) operating in the digital lending space have sought the Reserve Bank of India’s permission to offer pre-approved credit on the United Payments Interface (UPI) platform, a product the central bank opened for small finance banks earlier this month, people aware of the matter said.
“During the monthly ‘finteraction’ with the RBI and in individual meetings, the fintech industry has requested that the credit on UPI be extended to them as well,” an official told ET.
The RBI has designated one day for monthly interactions with the fintech industry called “finteraction”.
As per fintech firms, allowing them to offer credit lines on UPI will meet the regulator’s stated objective of making available low-ticket, low-tenor products to new-to-credit customers.
“In the recent December policy, when credit on UPI was extended to small-finance banks, we are quite hopeful that it’s just a matter of time before the regulator extends the scope to fintech NBFCs as well,” said another official.
On December 6, the RBI expanded the scope of the ubiquitous UPI by permitting small-finance banks to offer pre-approved credit lines, which is expected to reduce costs of digital offerings.
Fintech’s asking to be included in this list have also submitted that the move will ensure that the customer at the bottom of the pyramid gets better access to credit in a cost-efficient manner. Fintech’s can also leverage their high-tech and low-cost model using UPI-based lending to offer small loans.
