The 52nd MPC (monetary Policy Committee) meeting was held during December 4 to December 6. The MPC has decided to retain the repo rate at 6.5 per cent with majority of 5-1. The RBI has kept Repo rate unchanged for 11th straight time. It was changed in February 2023 to 6.5 pe cent from 6.25 per cent.
To improve financial inclusion, the Reserve Bank of India (RBI) has permitted Small Finance Banks (SFBs) to offer credit lines to their clients. It is anticipated that this ruling will increase underprivileged groups’ access to reasonably priced credit, such as micro-entrepreneurs, small enterprises, and individuals living in rural and semi-urban areas.
What is pre approved credit lines on UPI?
RBI launched a pre-approved credit line on UPI in September 2023 and was made available through scheduled commercial banks in the initial stage. The December MPC meeting has extended this service to small finance banks.
The Reserve Bank of India’s goal of expanding credit availability is Pre-Sanctioned Credit Lines on UPI. With the help of this product, people and small businesses can get bank-approved credit lines that can be used right away for transactions through the Unified Payments Interface (UPI).
UPI credit line easy access for fund requirement
This product guarantees hassle-free access to funds by seamlessly integrating retail loans, credit lines, and overdrafts with UPI, increasing the accessibility and convenience of credit. By meeting the urgent financial needs of marginalized communities and encouraging a cashless economy, it not only boosts economic growth but also bolsters financial inclusion.
Small finance banks
In India, small finance banks are a type of bank that was founded to offer basic banking services, mainly to underserved populations like individuals in rural and semi-urban areas, small businesses, unorganized sectors, and micro and small industries. Under the Banking Regulation Act of 1949, the Reserve Bank of India (RBI) has the authority to license and oversee these banks.
