Daily News

BNPL Vs Credit Cards Vs Personal Loans: Which is right for you?

Personal loans, BNPLs, and credit cards come in the same category of loans which benefits the lender for some time but it costs the interest for sure. All of these comes with high interests and specific durations. In this article, we will talk about these three aspects of loans and we will also see how they can be helpful sometimes.

Great Southern Bank (Formerly CUA) | Personal loans vs. buy now, pay later  – which should you choose?

What is BNPL

BNPL is stated as buy now pay later. They convert your payment into installments on any e-commerce website. They provide all the facilities to pay it online. Some charge the interest for the facility but some do it without any charges. Its business model is very simple, They integrate certain companies with it. BNPLs can currently be enjoyed many number of e-commerce, food-ordering, ride-sharing, travel booking, online groceries and services websites, and even on Edu-tech portals among hundreds of other merchant platforms. The transactions can be made seamlessly during checkouts in a safe and secure one-tap manner without having to enter card details or OTPs.

bnpl vs credit ardsTo assure secure payments and verified accounts, KYC is done before the BNPL service. For merchants- they can take payments through cash on delivery modes, credit/debit card, or pay later like BNPL services.

Microcredit solutions are preferred now to better manage recurring and occasional payments and purchases. In the last few years, BNPL has hugely taken a turn in the Indian market. Many e-commerce giants, leading banks, and startups are using BNPL as a good source of transaction and management. And no doubt it is making great progress.

How does BNPL compare with personal loans and credit cards?

Credit card is acceptable all around the globe and has vast facilities to provide. Credit cards come with much-assured amounts and provide certain facilities like Lower interest options, encash Contactless payment, Insurance, Utility Bills, Easy access channels. There are other additional benefits also. But if we talk about BNPL, it is limited to partnering merchants only. Though the service providers are regularly adding hundreds of partners.

Credit cards can come with major benefits but the interest rate of late payment can be difficult to manage. BNPL services are smaller but they are simpler. Credit facilities for consumer purchases from partnering merchants often result in EMIs involving no interest charges but only a one-time fee in most cases.



Daily News

What is a top-up loan and when should you go for it?

A top-up loan, along with a personal loan, a credit card, and other loan options, is an excellent way to obtain emergency cash. However, experts advise that at first, you must understand what a top-up loan is. And, when should you go for it?

Banks, housing finance firms, and other financial institutions offer top-up loans; which allow borrowers to borrow a specific amount of money in addition to their home loans. As a result, they are financing choices for borrowers who already have a loan with the lender, such as a home loan. Borrowers are normally only eligible for a top-up loan in this situation if they have been paying their EMIs on time and without default for at least a year.

“A borrower’s track record of repayments is one of the primary determining elements for the eligibility for top-up loans,” says Gaurav Jalan, CEO, and Founder of mpocket. This type of loan normally comes with the same terms and conditions as the original.”

In the event of an emergency, most people will either take out a personal loan. Or they will liquidate assets such as gold and property to get money. Experts believe that in some cases, a top-up loan on an existing house loan is a preferable option. Since top-up loans are readily available and come with a low interest rate.

Why top-up loan is right for you?

The most significant advantage of a top-up loan is that the borrower only has to complete minimal documents. Simply put, their existing loan EMIs will increase in proportion to the increased borrowing. It eliminates the need for the borrower to apply for a new loan; because it is approved based on the borrower’s existing loan with the lender. This streamlines the procedure and speeds up disbursement. As a result, this loan is a considerable choice for immediate funding.

Top Up Loan

“This makes it a perfect option in case of an urgent need for money,” Jalan explains. These loans are available for similar use as the original loan, but with fewer restrictions”. A home loan, for example, can only be used for that specific purpose. However, because a top-up loan is tied to an existing home loan, the borrower is not obligated to use the money for refurbishment or house repair. So this kind of loan is a good choice to borrow funds for house repairs or furnishing; as well as larger needs like business expansion, kid education, medical emergencies, and weddings. In summary, top-up loans have no restriction for their use.

“These loans are a perfect alternative in case of unanticipated occurrences or whenever one requires a personal loan, a loan against their property, or even gold,” Jalan continues. It’s a more convenient and hassle-free option in such situations.

Daily News

Total debt expected to rise to 61.7% of GDP in FY22: Finance Bhagwat Karad

The government told Parliament on Tuesday that the overall debt as a proportion of GDP will rise to 61.7 percent (provisional) in 2021-22, up from 60.5 percent (provisional) the previous fiscal year. At the same time, the public debt will rise to 54.2 percent in the current fiscal year, from 52 percent in 2020-21.

Ministry of finance - debt

Minister of State for Finance Pankaj Chaudhary said in a written reply to the Rajya Sabha that the government’s amendments of the FRBM Act will aim to put the country on a path of fiscal consolidation; with a fiscal deficit of less than 4.5 percent of GDP by 2025-26.

The government anticipates the fiscal deficit to fall to 6.8% in the current fiscal year, down from 9.3% in 2020-21.
He noted that any changes to the FRBM debt targets will be in line with the overall fiscal deficit trend.

RBI's circular on debt for Payment System Providers

In response to another question, the Minister of State for Finance Dr. Bhagwat Karad said the RBI issued a circular on “Storage of Payment System Data“; issued in 2018. The circular bounds, all system providers to ensure that all data relating to payment systems is stored solely in India. The storage data includes complete end-to-end transaction details collected, carried, and processed as part of the message/payment instruction.

debt expected to rise

System providers are also required to submit a compliance report to RBI. Along with, a board-approved System Audit Report (SAR) conducted by an impaneled auditor of CERT-In (Computer Emergency Response Team India).

In response to requests for clarifications on various issues from Payment System Operators (PSOs) on the above announcement. As well as for prompt compliance by all PSOs. He said the RBI published Frequently Asked Questions (FAQs) on the subject on June 26, 2019.

The RBI has notified that American Express Banking Corp (Amex), Diners Club International Ltd (Diners), and Mastercard Asia/Pacific Pte Ltd (Mastercard) failed to comply with the guidelines of the above circular.

Rbi ban credit card issuers

Accordingly, RBI has barred Amex and Diners from onboarding new domestic consumers onto their card networks. Beginning from 01.05.2021, until full compliance with the circular’s provisions and the submission of satisfactory SAR. Moreover, a similar prohibition was introduced on Mastercard from July 22, 2021.

Domestic banks already operate a sizable credit card business in the country. They have no restrictions on doing so. For more such updates, keep watching this space!

Daily News

RBI restricts Mastercard from issuing new debit, credit cards in India from 22 July

The Reserve Bank of India (RBI) restricts Mastercard from issuing new debit, credit cards in India from 22 July. The RBI order will not impact existing customers of Mastercard. The action has been against the payment system operator for violating RBI’s norms on the storage of payment systems data.


The Reserve Bank of India (RBI) on Wednesday imposed restrictions on Mastercard Asia / Pacific Pte Ltd (Mastercard). Restrictions will stop Mastercard from onboarding new domestic debit, credit, or prepaid customers on its card network. The ban on Mastercard issuing new cards will come into effect from 22 July.

The order comes as firms such as Mastercard and Visa also face growing competition from domestic payments network Rupay. Rupay is an Indian Payments System Operator, which has been enjoying high promotion from PM Narendra Modi.

What are the reasons behind the ban?


The action is taken against the payment system operator for violating RBI’s norms on the storage of payment systems data. RBI said in its official statement that notwithstanding the lapse of considerable time and adequate opportunities being given, the entity is non-compliant with the directions on Storage of Payment System Data.

The central bank also added that this order will not impact existing customers of Mastercard. Mastercard shall give its advisory to all card-issuing banks and non-banks to conform to these directions. RBI took the supervisory action while exercising the powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act).

Mastercard is a Payment System Operator authorized to operate a Card Network in the country under the PSS Act. The PSS Act, 2007 provides for the regulation and supervision of payment systems in India. It designates the Reserve Bank of India as the authority for that purpose and all related matters. This act authorizes Reserve Bank to constitute a Committee of its Central Board known as the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). The committee will exercise its powers and perform its functions and discharge its duties under this statute.

The move comes less than three months after the RBI barred American Express and Diners Club International, owned by Discover Financial Services. Both the companies got restrictions from issuing new cards due to similar violations. Earlier, the central bank directive in 2018 sparked an aggressive lobbying effort from US firms. These rules would increase their infrastructure costs and hit their global fraud detection platforms. However, the RBI did not relent. For more such updates, keep watching this space!