RBI allows pre-approved credit lines on UPI from small finance banks

The Reserve Bank of India (RBI) has widened the scope of Unified Payments Interface (UPI) transactions by allowing small finance banks (SFBs) to provide pre-sanctioned credit lines. RBI had introduced credit lines on UPI in September 2023 for banks and third party apps.

UPI currently facilitates transactions through linked savings accounts, overdraft accounts, prepaid wallets, and credit cards. With the update, credit lines will become an additional source of funding. Users will have to provide explicit consent before utilising pre-sanctioned credit lines.