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The Reserve Bank of India (RBI) has unveiled an array of innovative fintech initiatives, including the integration of AI-powered “conversational” payments into India’s Unified Payments Interface (UPI) and the creation of a public digital platform to streamline credit provision.
In its endeavor to enhance UPI (Unified Payments Interface) capabilities, the central bank has recognized the potential of AI to facilitate conversational payments. This cutting-edge feature will allow users to interact with an AI-powered system, initiating and completing transactions through natural language conversation. Initially launching in Hindi and English, this functionality will be accessible through both smartphone and feature phone-based UPI channels.
To extend financial inclusion, the RBI is also pioneering offline payments on the UPI platform.
Efforts to expedite small-value transactions on UPI resulted in the introduction of an on-device wallet named UPI-Lite last year. This solution has gained substantial traction, processing over ten million transactions per month. The RBI intends to further promote the usage of UPI-Lite by enabling offline transactions through NFC technology.
In parallel, the RBI aims to encourage fintechs and startups to offer credit products. Recognizing that credit appraisal data are distributed across various entities and systems, inhibiting smooth and timely delivery, the RBI initiated a pilot project for the digitalization of Kisan Credit Card loans last year. This endeavor tests an end-to-end digital lending process, eliminating paper-based hassles. Early results from the ongoing pilot are promising.
To facilitate a seamless flow of essential digital information to lenders, the RBI is now developing a digital platform. This platform will feature an open architecture, open APIs, and standards, allowing all players in the financial sector to seamlessly connect through a ‘plug and play’ model.
With these forward-looking initiatives, India is poised to harness the power of AI and digitalization to revolutionize payments and credit accessibility through its UPI system, contributing to financial empowerment and inclusion across the nation.
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