The Reserve Bank said on Monday that pre-approved credit lines given by banks for transactions will also be included in the UPI System. Prior to now, the UPI System could only be used to transfer the deposited money.
The RBI proposed permitting transfers to/from pre-approved credit lines at banks in April using the Unified Payments Interface (UPI). Credit cards, savings accounts, overdraft accounts, and prepaid wallets can use UPI.
According to a circular on “Operation of Pre-Sanctioned Credit Lines at Banks through UPI,” the use of credit lines as a funding account has now increased the reach of UPI. “Under this facility, payments through a pre-sanctioned credit line issued by a Scheduled Commercial Bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI System,” the RBI stated.
This can save costs and aid in the creation of distinctive goods for Indian consumers. UPI transactions, which allow rapid money transfers via mobile devices, exceeded 10 billion in August. July UPI transactions totalled 9.96 billion (996.4 crore), up from 9.33 billion in June.
The RBI will incorporate bank-pre-approved credit lines in the Unified Payments Interface (UPI) System. This expansion was recommended in April and allows transfers to/from pre-approved credit lines at banks. UPI can be connected to savings accounts, overdraft accounts, prepaid wallets, and credit cards. The use of credit lines as a funding account has increased the reach of UPI, potentially saving costs and aiding in the creation of distinctive goods for Indian consumers. UPI transactions surpassed the 10-billion-transaction threshold in August.