The Reserve Bank of India (RBI) has recommended allowing credit cards to be linked to the UPI network, Governor Shaktikanta Das stated on Wednesday as he announced a rate rise.

The Rupay credit cards will be linked to the UPI platform, which will give consumers extra ease and expand the scope of digital payments, according to Das. Currently, UPI supports transactions by connecting users’ debit cards to savings or current accounts.

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“UPI has become the most inclusive mode of payment in India with over 26 crore unique users and five crore merchants on the platform.”

“The progress of UPI in recent years has been unparalleled. Many other countries are engaged with us in adopting similar methods in their countries,” RBI Governor Das said.

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According to Das, about Rs 10.4 lakh crore was processed through UPI in May of this year alone. Unified Payments Interface (UPI) is a technology that integrates several bank accounts into a single phone app (of any participating bank), combining many banking services, smooth fund routing, and merchant payments under one umbrella. It also handles “Peer to Peer” collect requests, which may be planned and paid according to need and convenience.

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“Inflation has steeply increased much beyond the tolerance level. The process of recovery in emerging market economies is also getting affected. But the Indian economy has remained resilient. We have started a gradual withdrawal of the extraordinary accommodation. The RBI will continue to be proactive and decisive in mitigating the fallout of the geopolitical crises on our economy. Our steps will be measured and calibrated,” said Das.     

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“The ongoing war turning out to be a dampener on global trade and growth. Domestic economic activity is gaining traction while inflation pressures have intensified. Inflationary pressures have become broad-based and remain largely driven by supply shocks. The Repo rate remains below its pre-pandemic level. Inflation is likely to remain near the upper tolerance of 6% for the first three quarters of this year. Sustained high inflation could unhinge inflation expectations”, he added.      

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“Information for April-May suggests domestic economic recovery is firm. Urban demand is recovering, rural demand is also improving. Surveys show capacity utilisation in the manufacturing sector increased to 74.5% in January-March,” Das said.