Unclear guidelines hold back growth of credit line on UPI

Nearly two years after its launch, the credit line on UPI (CLOU) product continues to see limited adoption, as banks and fintech companies remain uncertain about its treatment and reporting requirements, according to multiple industry sources.

- AJINKYA KAWALE

A key point of confusion is whether the product should be classified and reported as a credit card or a personal loan, each governed by different Reserve Bank of India (RBI) guidelines and compliance obligations.

Estimates suggest that the CLOU clocked around ₹500 crore in value per month last year. That figure may have declined this year after a major private sector lender paused the offering, a source said.

Industry participants added that further clarity is required on reporting the use of CLOU to credit bureaus in India.