RBI vide circular dated September 04, 2023 has issued clarification regarding Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI). 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.
The Statement on Developmental and Regulatory Policies dated April 06, 2023, expanded 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. 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.
