Friday, 07 October 2022

RBI Allows Credit Card Linking via UPI

RBI Allows Credit Card Linking via UPI

To further increase the usage and reach of the Unified Payments Interface (UPI), the Reserve Bank of India proposed allowing the linking of credit cards to the instant real-time payment systems.

RBI stated.

"To start with facility Rupay credit cards will be enabled with this facility. This arrangement is expected to provide more path and convenience to the customers in making payments through the UPI platform. This UPI facility would be available after the required system development is complete,"

It added that necessary instructions would be issued separately to the National Payments Corporation of India (NPCI).

Currently, UPI facilitates transactions by linking current or savings accounts through users' debit cards.

UPI has become India's most inclusive mode of payment, with over 26 crore unique users and five crore merchants onboarded on the platform, RBI governor Shaktikanta Das said.

In May, he added that 594.63 crore transactions amounting to ₹ 10.40 lakh crore were processed through UPI.

The consistency of prepaid payment instruments (PPIs) has also facilitated access of PPIs to the UPI payment system for undertaking transactions, the RBI chief further stated.

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These banks provide RuPay credit cards.

If you do not have a credit card, you may be wondering which banks provide RuPay credit cards. Some banks allow their customers to have Saraswat Co-operative Bank, IDBI Bank (IDBI), Union Bank, State Bank of India (SBI), Bank of Baroda, Federal Bank, and Punjab National Bank (PNB). RuPay also provides co-brand cards with a few banks like HDFC Bank, SBI, PNB, and Union Bank.

SBI Cards, Paytm share prices gain

After the RBI announcement related to UPI transactions, SBI Card's share prices gained 4.2 percent, while the share prices of One97 Communications Ltd, the parent company of Paytm, rose 3.2 percent.

The RBI also proposed to enhance the e-mandate limit on cards for recurring payments from ₹ 5,000 to ₹ 15,000.

Meanwhile, RBI raised the key interest rate by 50 basis points (bps) to cool persistently high inflation.

The monetary policy committee (MPC) raised the key lending rate or the repo rate by 50 bps to 4.90 percent.

The Standing Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate were higher by the same quantum to 4.65 percent and 5.15 percent, respectively.

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