Paytm, India's largest digital wallet based on the number of accounts, is partnering with ICICI Bank to offer instant interest-fee short-term credit through the service, according to multiple India media reports.

At the moment, the credit offers are only available to select ICICI customers using the Paytm app. The companies plan to make the service available to non-ICICI customers in the future.

The service, called Paytm-ICICI Bank Postpaid, offers users instant credit of up to 20,000 rupees (U.S. $308). The amount remains interest free for 45 days. A 3 percent interest rate goes into affect after that period.

The companies are using an algorithm to determine the credit worthiness of a customer. 

"We believe our customers are sincere with their payments and Paytm Postpaid will play a major role in helping them pay for their daily expenses on time," Vijay Shekhar Sharma, Paytm founder and CEO, said in a statement to local media. "This will democratize access to credit including those with less disposable income."