State Bank of India to offer loans based on UPI transaction data

State Bank of India (SBI) is developing a new lending system that utilizes Unified Payments Interface (UPI) transaction data to assess loan eligibility. According to Managing Director Ashwini Kumar Tiwari, this initiative specifically targets small businesses that may lack GST registration.

By analyzing digital transaction records and potentially telecom data with customer consent, the bank aims to use regular sales patterns as indicators of creditworthiness. This approach seeks to bridge the credit gap for small merchants and traders who maintain consistent digital payment records but lack formal tax documentation.

SBI has already demonstrated success in digital lending, distributing approximately Rs 1 lakh crore in loans over the last 18 months using GST and PAN data. The new UPI-based model is intended to further expand financial inclusion for the unorganized business sector.