**Summary:**
The Ministry of Finance announced on August 4, 2025, a series of government and financial institution initiatives designed to promote digital payment transactions and enhance financial inclusion. Key efforts include incentive schemes for RuPay Debit Cards and low-value BHIM-UPI transactions (P2M), and the Payments Infrastructure Development Fund (PIDF) aimed at expanding digital payment infrastructure in underserved areas. Measures to combat payment fraud include device binding, two-factor authentication, transaction limits, and AI/ML-based fraud monitoring solutions provided by NPCI to banks. The RBI and banks are also conducting awareness campaigns on cybercrime prevention.
To increase regulation and transparency within cooperative societies and microfinance institutions, the RBI has issued a regulatory framework requiring all regulated entities to adopt a board-approved policy for pricing microfinance loans. This includes a transparent interest rate model encompassing the cost of funds, risk premium, and margin. The definition of a microfinance loan has been simplified, and quantitative restrictions on loans given by NBFC-MFIs have been removed, eliminating limits on loan amounts and minimum loan tenures. The requirement of providing a minimum of 50 loans for income generation has also been dispensed with.
This information was provided by Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha. Release ID: 2152228.
Key Entities Referenced
Reserve Bank of India: The central bank of India, playing a key role in regulating financial institutions and promoting digital payments.
National Payment Corporation of India: An organization that promotes and facilitates digital payments in India, including the development and implementation of systems like RuPay and BHIMUPI.
RuPay Debit Cards: An Indian domestic card scheme that facilitates digital payment transactions.
BHIMUPI: A mobile payment system based on Unified Payment Interface (UPI) for quick and easy money transfers.
Payments Infrastructure Development Fund: A fund created to support the deployment of digital payment infrastructure in underserved regions of India.
Ministry of Finance: The ministry responsible for financial matters of the Government of India.
Shri Pankaj Chaudhary: Minister of State in the Ministry of Finance.
Lok Sabha: The lower house of the Parliament of India.
Ministry of Finance
Multiple initiatives taken by Government and other
financial institutions to promote digital payment
transactions
Financial inclusion key Government priority; Steps
taken to regulate and increase the transparency of
cooperative societies and microfinance institutions
Posted On: 04 AUG 2025 6:16PM by PIB Delhi
The Government, Reserve Bank of India (RBI) and National Payment Corporation of India (NPCI) have been
taking up various initiatives to promote digital payment transactions. These inter alia, include incentive
scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M), Payments
Infrastructure Development Fund (PIDF) to support deployment of digital payment infrastructure in
underserved regions.
Further, to prevent payment-related frauds, various initiatives have been taken up such as device binding
between the customer's mobile number and device, two-factor authentication through PIN, daily transaction
limits, and restrictions on use cases. NPCI also provides a fraud monitoring solution to all the banks to
generate alerts and decline transactions using AI/ML-based models. RBI and banks have been conducting
awareness campaigns through short SMS, radio campaigns, and publicity on the prevention of cyber-crime.
Various initiatives have been taken from time to time to increase the regulation and transparency of
cooperative societies and microfinance institutions for financial inclusion.
These, inter alia include:
RBI has issued a regulatory framework to all regulated entities to adopt a board-approved policy
(cid:108)
for pricing microfinance loans. This include a transparent interest rate model covering cost of
funds, risk premium, and margin.
The definition of microfinance loan has been simplified and various quantitative restrictions on
(cid:108)
loans given by NBFC-MFIs have been removed, including limits on loan amount in a particular
cycle and minimum tenure for loans over a particular threshold.
Erstwhile requirement of providing minimum 50% loans for income generation purposes has been
(cid:108)
dispensed with, considering the need of credit for medical, educational and income smoothening
purposes.
This information was given by Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in a
written reply to a question in Lok Sabha today.
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NB/AD(Release ID: 2152228)