Credit line on UPI – Extending the scope of Small Finance Banks
Credit line on UPI – Extending the scope of Small Finance Banks
Reserve Bank of India today placed on its website an updated circular on Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI).
As announced in the Statement on Developmental and Regulatory Policies dated December 06, 2024, the scope of credit on UPI is extended to SFBs as well.
Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI) (Updated as on February 12, 2025)
Please refer to the Statement on Developmental and Regulatory Policies dated April 06, 2023 and December 06, 2024, expanding the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks. Currently, savings account, overdraft account, prepaid wallets and credit cards can be linked to UPI. As announced, the scope of UPI is now being expanded by inclusion of credit lines as a funding account.
2. Under this facility, payments through a pre-sanctioned credit line issued by a Scheduled Commercial Bank to individuals, with prior consent of the individual customer, are enabled for transactions using the UPI System.
3. Banks may, as per their Board approved policy, stipulate terms and conditions of use of such credit lines. The terms may include, among other items, credit limit, period of credit, rate of interest, etc.
4. This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
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