India’s largest payment platform, Paytm has teamed up with one the country’s largest private sector banks to offer interest-free digital credit its users.

This interest-free short-term digital credit is called Paytm-ICICI Bank Postpaid. The loan amount will be up to Rs. 20,000 ($306) for a maximum of 45 days.

If the user exceeds the 45 days mark, he will be hit with a penalty of Rs.50 and an interest rate of 3% per month.

Users can apply for the loan through Paytm’s mobile app. The credit limit is currently being offered to only a select ICICI consumers that use Paytm app. Gradually, it will be opened to all Paytm users, even non-ICICI customers.

In a statement to the Economic Times of India, Anup Bagchi, executive director ICICI Bank said:

We have seen that many customers—who are new-to-credit and therefore, do not have a credit history– are looking for short term credit and millions of young Indians are now buying products online. We have combined these two insights to bring out a novel proposition of giving short term credit to people, completely online and instantly. In this endeavor, we have leveraged upon Big Data to develop a new algorithm that instantly assesses the credit worthiness of customers using a combination of financial and digital parameters to sanction the credit line instantly.

Read more at Economic Times and Money Control.