RBI Allows UPI-Credit Card Linking; Check Details

Mumbai: The Reserve Bank of India (RBI) on Wednesday proposed to allow the linking of credit cards to the instant real-time payment system. This facility, which currently facilitates transactions by linking savings and current accounts through debit cards, will be initially available for RuPay Credit Cards only.

RBI governor Shaktikanta Das said that Unified Payment Interface (UPI) has become the most inclusive mode of payment in India.  At present, over 26 crore unique users and 5 crore merchants are onboarded on the UPI platform. In May 2022 alone, 594.63 crore transactions amounting to Rs 10.40 lakh crore were processed through UPI.

“In order to further deepen the reach and usage, it is proposed to allow linking of credit cards to UPI. To start with Rupay credit cards will be enabled with this facility,” the RBI said after the bi-monthly monetary policy meeting on Wednesday.

“This facility would be available after the required system development is complete. Necessary instructions will be issued to NPCI separately,” it added.

On the other hand, the hike in repo rate by 50 bps will increase lending rates by banks and borrowers may have to pay more for loan EMIs. It is likely to make home loans costlier and hit affordable and mid-segment housing demand, experts opined.