Bank of Baroda Pioneers UPI Overdraft Facility for Women Self-Help Groups
In a landmark move for financial inclusion, Bank of Baroda has become the first bank in India to launch an Overdraft (OD) Facility on Credit Line via UPI for verified women Self-Help Group (SHG) members holding Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. The initiative was unveiled at the 25th Central Level Coordination Committee (CLCC) meeting in Hyderabad, marking a significant step in strengthening financial inclusion and empowering women-led economic growth across the nation.
Digital Credit Access for Rural Women
The new facility provides eligible SHG members with ₹5,000 in overdraft credit, accessible directly through bob इ Pay or any UPI-enabled application. This innovative solution allows users to link their OD accounts to make merchant QR payments, view balances, track transactions, and repay digitally—completely eliminating the need for physical branch visits. This digital-first approach is designed to bring formal credit to the doorsteps of rural women, many of whom have limited access to traditional banking services.
Strategic Partnerships for Scalable Impact
The project has been launched in partnership with the National Payments Corporation of India (NPCI), the Indian Banks’ Association (IBA), and the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM). Together, these institutions aim to create a scalable model for small-ticket lending nationwide, aligning with government priorities under Digital India, PMJDY, and DAY-NRLM. This collaboration represents a concerted effort to bridge the credit gap for underserved communities through technology-driven solutions.
Key Benefits and Features
- Digital Access: ₹5,000 overdraft available instantly via UPI applications, providing immediate financial liquidity.
- Empowerment: Promotes economic independence and social inclusion for rural women, fostering self-reliance.
- Credit History: Helps build a formal credit footprint, enabling access to larger loans in the future.
- Transparency: Ensures traceability of fund flows and repayments, reducing fraud and enhancing accountability.
- Scalability: Provides a framework for nationwide expansion, potentially benefiting millions of women across India.
Expert Insights on Financial Inclusion
Sohini Rajola, executive director – Growth at NPCI, emphasized the transformative potential of this initiative. “The introduction of Credit Line on UPI - OD Facility for women SHG members marks an important step towards enabling convenient and transparent access to formal credit. This will empower women financially and contribute to India’s inclusive digital economy,” she stated. Her comments highlight how digital infrastructure can be leveraged to address longstanding barriers to financial services.
Broader Implications for India's Digital Economy
This development is not just a banking innovation but a critical component of India's broader digital transformation. By integrating UPI with overdraft facilities, Bank of Baroda is setting a precedent for other financial institutions to follow. The initiative supports the government's vision of a less-cash economy while promoting gender equality through targeted financial products. As more women gain access to formal credit, it is expected to stimulate local economies, enhance household financial stability, and drive sustainable development in rural areas.
