RBI to allow small finance banks to extend credit lines through UPI

The Reserve Bank of India (RBI) has granted approval for small finance banks to extend credit lines to customers through the Unified Payments Interface (UPI). This move is aimed at improving financial inclusion and offering easy access to credit for individuals who are typically underserved by traditional banking channels. Small finance banks, which have a focus on serving rural and low-income populations, will now be able to provide credit facilities via UPI, allowing for greater accessibility and ease of repayment. This development is seen as a significant step in enhancing the banking sector’s reach and contributing to the growth of digital financial services in India, where UPI is already a popular method of payment.