RBI allows scheduled commercial banks to issue credit lines through UPI
Mumbai, Sep 4 2023
The Reserve Bank of India has allowed scheduled commercial banks to issue credit lines through Unified Payments Interface (UPI) – a move to expand the scope of the UPI payment system.
The regulator said banks may, as per their board-approved policy, stipulate terms and conditions of use of such credit lines. These would include credit limit, period of credit, rate of interest, and so on.
"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," RBI said in a notification on Monday.
At present, UPI handles 75 per cent of the retail digital payments volume in India. Recently, RuPay credit cards were permitted to be linked to UPI. UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.
[The Business Standard]