RBI aligns prudential norms for UPI-linked credit lines with base loans

Mumbai, Jun 23, 2026

Central bank says prudential treatment of payment-linked credit facilities will depend on the nature of the underlying loan, irrespective of delivery mode

The Reserve Bank of India (RBI) on Tuesday said that pre-sanctioned credit lines offered through the Unified Payments Interface (UPI) and other payment-linked credit facilities will be subject to the same prudential norms as the underlying credit product, irrespective of the delivery mode.

“Notwithstanding the mode or channel of credit delivery or the type of payment instrument and/or underlying technology used for its disbursement, the prudential treatment of an underlying credit facility, including pre-sanctioned credit lines meant for payment transactions through UPI, shall be solely determined by the nature of the underlying credit facility, governed in terms of the applicable prudential norms,” the RBI said.

The move comes nearly three years after the RBI allowed banks to offer pre-sanctioned credit lines through UPI with customers' prior consent. The central bank said the amendment aimed to ensure consistency in regulatory compliance across banks offering such products.

The RBI also clarified that only credit facilities otherwise permitted under existing regulations can be offered through such arrangements. This means banks cannot introduce a new category of lending merely by routing it through a payment mechanism such as UPI.

[The Business Standard]