The Reserve Bank of India (RBI) has approved small finance banks (SFBs) to offer credit lines on the Unified Payments Interface (UPI), in accordance with the regulator’s announcement made during the December 2024 monetary policy committee meeting.
This product empowers individuals and small businesses to obtain pre-sanctioned credit lines from banks, which can be utilised immediately for transactions through UPI. It facilitates availability and frictionless usage of credit lines, overdrafts and retail loans.
“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,” the RBI said.