The Reserve Bank of India (RBI) has introduced several key measures to enhance the financial ecosystem, focusing on the integration of advanced technologies and the expansion of payment systems. Governor Shaktikanta Das, during the monetary policy announcement on Friday, outlined these initiatives, which include the linking of pre-sanctioned credit lines to the Unified Payments Interface (UPI) for Small Finance Banks (SFBs).

This development builds upon a feature launched in September 2023, which allowed Scheduled Commercial Banks (excluding Payment Banks and SFBs) to link pre-approved credit lines with UPI. By extending this facility to SFBs, the RBI aims to provide last-mile customers, particularly those new to credit, with better access to low-ticket and short-term credit products. SFBs, known for their technology-driven and cost-effective operations, are expected to play a pivotal role in reaching underserved sections of the population. Operational guidelines for implementing this initiative will be released soon, ANI reports.