UPI Credit Feature Hits Rs 10,000 Cr in Monthly Transactions

The National Payments Corporation of India (NPCI) is experiencing a significant increase in transactions through its UPI credit feature, with monthly transactions reaching around Rs 10,000 crore. Dilip Asbe, the CEO and Managing Director of NPCI, mentioned that most of these transactions are from the credit card feature. Additionally, pre-sanctioned credit lines on UPI are also becoming popular, with up to Rs 200 crore being disbursed monthly.

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Credit Card Feature and Bank Participation

Introduced in November 2022, the UPI credit card feature allows users to link their credit cards to the app, consolidating all payments into the monthly credit card bill. Several lenders now offer this facility. ICICI Bank leads in providing pre-sanctioned credit limits on UPI, with about six other banks following suit.

Growth Amid Concerns

This development occurs amid rising concerns over the rapid growth of unsecured loans, including credit cards and personal loans. The Unified Payments Interface (UPI) remains a widely used platform, recording 466 million transactions in July alone. Asbe highlighted that UPI is poised for further growth.

Central Bank Digital Currency (CBDC)

Asbe clarified that the central bank digital currency (CBDC) aims not to compete with UPI but offers unique features like programmability beneficial for India. Former RBI executive director G Padmanabhan noted a trust deficit between fintech firms and regulators. He emphasized that fintech companies are eager to align with regulatory requirements.

A recent survey by a consultancy firm revealed that less than one-third of fintech respondents feel aligned with highly-regulated established players on governance aspects, slightly up from 27% last year. The Global Fintech Festival will address these issues.

Global Fintech Festival Highlights

The event will feature Finance Minister Nirmala Sitharaman, RBI Governor Shaktikanta Das, Sebi chairperson Madhabi Puri Buch, and other dignitaries at the Bandra Kurla Complex business district. Prime Minister Narendra Modi recently expressed his ambition to make Mumbai a global fintech capital. Mumbai has long been India's financial hub, while Gujarat hosts the country's only International Financial Services Centre.

Padmanabhan mentioned that discussions on digital currencies would focus on CBDC without revisiting RBI's stance on cryptocurrencies like Bitcoin. The three-day event will include 350 sessions, 20 reports, 800 speakers (including 150 women), and attract 80,000 attendees from over 25 central banks worldwide.

Infosys co-founder Krish Gopalakrishnan highlighted networking and investor connections as key focus areas at the event, expecting over 300 investors to participate.

The NPCI's initiatives and the upcoming Global Fintech Festival underscore India's dynamic fintech landscape and its potential for continued growth and innovation.