Unified payment interface to be functional by month-end: Rajan

The Unified Payment Interface (UPI) will be functional by the end of this month, according to Raghuram G Rajan, Governor, Reserve Bank of India.

He was speaking at a seminar on equity access and inclusion — Transforming rural India through financial inclusion — at the National Institute of Rural Development and Panchayati Raj here on Monday.

“I have been assured by NPCI in this regard and we are on the verge of solving some problems,” Rajan said, adding that the UPI will eliminate the need to go to bank branches.

Under this, a bank provides the user a virtual address, which could be shared with the payee. This eliminates the need to share the mobile number or account number, ensuring privacy and promotes a cashless economy.

For better credit expansion, land and use of land for income should be allowed for monetisation, Rajan said.


On the approaches to financial inclusion, he said an approach based on mandates and subventions (such as priority sector norms and interest subventions) had ‘positive’ social benefits that were not captured by the service provider and were ‘reasonable’ from a societal perspective though there were some risks associated with them.

“So, while acknowledging the value of mandates at the RBI, we have tried to make them more effective. For example, the list of sectors eligible for priority sector treatment has been revised, with an emphasis on targeting the truly excluded,’’ the Governor said.

Likewise, creating right institutions such as local financial institutions and going beyond a credit-driven approach to focus on easing payments and remittances could be of help, he added.


While managing the process of financial inclusion, some important issues including Know Your Customer (KYC) requirements, encouraging competition to prevent exploitation, ensuring some flexibility and forgiveness in financial arrangements, besides encouraging financial literacy and ensuring consumer protection, should be kept in mind, Rajan said.