RBI Permits Small Finance Banks to Offer Pre-Sanctioned Credit via UPI
| Aspect | Details |
|---|---|
| Why in the news? | RBI permits Small Finance Banks (SFBs) to offer pre-sanctioned credit lines via UPI. |
| Objective | Expand credit access to underserved groups, including small businesses and rural populations. |
| Types of Credit Products | Smaller loans with short terms for customers who are "new-to-credit." |
| UPI Integration | Pre-sanctioned credit lines linked to UPI to streamline financial transactions. |
| Impact on SFBs | SFBs can now offer digital credit products, enhancing financial inclusion. |
| Guidelines | RBI to release guidelines for implementation of pre-sanctioned credit via UPI. |
| Financial Inclusion | Targeting micro-entrepreneurs, small businesses, and rural populations. |
| Previous Policy Change | In September 2023, RBI allowed Scheduled Commercial Banks to link pre-sanctioned credit to UPI. |
| MPC Decision on Repo Rate | Repo rate remains at 6.5%, unchanged for the 11th consecutive time. |
| Revised GDP Growth Forecast | Revised down to 6.6% from 7.2% for the current financial year. |