RBI allows small finance banks to offer pre-sanctioned credit line on UPI

The Reserve Bank of India (RBI) on Friday allowed small finance banks to offer pre-sanctioned credit lines through Unified Payments Interface (UPI). Previously, only scheduled commercial banks were allowed to offer pre-sanctioned credit lines on the flagship payments platform.

“This will further deepen financial inclusion and enhance formal credit, particularly for ‘new to credit’ customers,” said the RBI after the monetary policy kept the key interest rate unchanged but cut the cash reserve ratio that banks are required to hold.