Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI)

Last updated: 05 September 2023

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The Reserve Bank of India has announced a significant expansion of the Unified Payments Interface (UPI) system. Customers can now make payments directly from pre-sanctioned credit lines offered by scheduled commercial banks. This facility allows for transactions using these credit lines, provided the customer has given their prior consent. Banks will set their own terms and conditions for these credit lines, including limits and interest rates.

Reserve Bank of India

RBI/2023-24/58
CO.DPSS.POLC.No.S-567/02-23-001/2023-2024 Dated: September 04, 2023

The Managing Director / Chief Executive Officer
Scheduled Commercial Banks (excluding Payment Banks, Small Finance Banks and Regional Rural Banks)

Madam / Dear Sir,

Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI)

Please refer to the Statement on Developmental and Regulatory Policies dated April 06, 2023, 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).

Yours faithfully,

(Gunveer Singh)
Chief General Manager-in-Charge

FAQ :

UPI can now be used to make payments directly from pre-sanctioned credit lines issued by scheduled commercial banks.

This facility is for scheduled commercial banks, excluding Payment Banks, Small Finance Banks, and Regional Rural Banks.

Yes, payments through pre-sanctioned credit lines via UPI require the prior consent of the individual customer.

Banks may, as per their Board approved policy, stipulate terms and conditions such as credit limit, period of credit, and rate of interest.

Currently, savings accounts, overdraft accounts, prepaid wallets, and credit cards can be linked to UPI.

Notification No : RBI/2023-24/58
Source : https://rbidocs.rbi.org.in/rdocs/notification/PDFs/CREDITONUPI6DBE2D06A61540D19322CFA718643920.PDF

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