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ARTICLE · 24 MARCH 2022

Credit Through UPI: Need For Regulatory Clarity

Ikigai Law
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Moving money through UPI is like taking an Uber between two deposit accounts. UPI picks money (already lying-in deposit accounts) and moves it to another deposit account, like bank accounts and PPI accounts. 

IndiaTechnology
Ikigai Law
Ikigai Law
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This post explains the legal grey areas in offering credit through UPI. It provides a snapshot of regulatory action by NPCI and highlights implementation issues which must be resolved to enable this use-case.

Moving money through UPI is like taking an Uber between two deposit accounts. UPI picks money (already lying-in deposit accounts) and moves it to another deposit account, like bank accounts and PPI accounts.?? 

But what if UPI could travel to and from other destinations? Like loan accounts, fixed deposits, or liquid mutual funds. What if you could pay through UPI by accessing a short-term loan from a digital lender? We conducted a LinkedIn poll last year, where we asked participants which underlying account they would prefer to make UPI payments: 36 % respondents chose credit products. Credit on UPI, we think, is a powerful value proposition.?Our partner, Aparajita Srivastava, also spoke about credit on UPI at the Carnegie Global Tech Summit and

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