Axis Bank also introduced the first UPI-backed gold-secured credit line in India

1. Core Product

• Axis Bank in collaboration with Freecharge has introduced the first gold-based credit line in the country that could be accessed through UPI.
• It is intended to be sold to MSMEs, self-employed people, and merchants.

2. Key Features & Functionality

• Collateral: Customers may use their gold holdings to obtain an instant and flexible credit line or digital overdraft facility.
• Interest Charges: Interest is never charged on the whole authorized limit but only on the amount used.
• Digital-First: UPI or Freecharge app can be used to process all payments and repayments in real-time.
• Convenience: Does not require going to a bank branch once initial onboarding has been completed.

3. Target Benefits

• Facilitates the working capital.
• Funds the expansion of business.
• Relieve liquidity crises facing individual businesses and entrepreneurs.

4. Regulatory Background and Importance.

• Its introduction is based on the guidelines of the NPCI (National Payments Corporation of India), which advocates the provision of credit lines through UPI.
• It considerably increases the scope and efficiency of online lending in India.
• The product is in line with the vision of Reserve Bank of India (RBI) to improve access to digital credits and financial inclusion.