Indian banks have asked the Reserve Bank of India (RBI) to allow their customers with UPI 2.0-enabled devices to use the recurring payments feature for loan repayments, The Economic Times reported.
The newly developed technology by the National Payment Corporation of India (NPCI) in August 2018 has been one of the most anticipated recurring deposit features by the banks, the report said.
However, the central bank, citing concerns regarding the possible misuse of the feature, left this feature out from the official version, the report added citing industry sources.
"This feature would have enabled customers to issue a one-time mandate to make recurring payments for periodic services rendered from merchants. The use cases for this would have been automatic payments of monthly bills and subscription-based services," a senior unnamed bank official was quoted as saying in the report.
After the launch of the feature last year, Indian Banks' Association, an industry body with representatives from private and public banks had written the regulator asking for permission to use the feature that enables a customer to avail loans and pay premiums, the report added.
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