RBI allows operation of pre-sanctioned credit lines at banks through UPI

[Abhishek012]

RBI allows operation of pre-sanctioned credit lines at banks through UPI​

Scheduled Commercial Banks (SCBs) can now enable payments through a pre-sanctioned credit line for individuals, with prior customer consent, for transactions using the UPI (unified payments interface) system, according to the RBI. With this, the scope of UPI has been expanded by inclusion of credit lines as a funding account, the central bank said in a circular to SCBs (excluding Payment Banks, Small Finance Banks and Regional Rural Banks).

The central bank, in its statement on development and regulatory policies (April 06,2023), said it will expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks. At present, savings account, overdraft account, prepaid wallets and credit cards can be linked to 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 release added.

This can reduce the cost of such offerings and help in development of unique products for Indian markets.

The UPI is a robust payments platform supporting an array of features. Presently it handles 75% of the retail digital payments volume in India. The UPI system has been leveraged to develop products and features aligned to India’s payments digitisation goals. Recently, RuPay credit cards were permitted to be linked to UPI. At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.

 

[rockking1994]

Reward kitna milega bhai vo bata
But on a serious note this will enable credit accessibility to the last man hope banks don’t exploit the uninitiated and have reasonable interest rates

 

[SSV]

RBI allows operation of pre-sanctioned credit lines at banks through UPI​

Scheduled Commercial Banks (SCBs) can now enable payments through a pre-sanctioned credit line for individuals, with prior customer consent, for transactions using the UPI (unified payments interface) system, according to the RBI. With this, the scope of UPI has been expanded by inclusion of credit lines as a funding account, the central bank said in a circular to SCBs (excluding Payment Banks, Small Finance Banks and Regional Rural Banks).

The central bank, in its statement on development and regulatory policies (April 06,2023), said it will expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks. At present, savings account, overdraft account, prepaid wallets and credit cards can be linked to 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 release added.

This can reduce the cost of such offerings and help in development of unique products for Indian markets.

The UPI is a robust payments platform supporting an array of features. Presently it handles 75% of the retail digital payments volume in India. The UPI system has been leveraged to develop products and features aligned to India’s payments digitisation goals. Recently, RuPay credit cards were permitted to be linked to UPI. At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.

As usual thanks for sharing with us... Lets see how this story unfolds...

 

[plastikman]

RBI allows operation of pre-sanctioned credit lines at banks through UPI​

Scheduled Commercial Banks (SCBs) can now enable payments through a pre-sanctioned credit line for individuals, with prior customer consent, for transactions using the UPI (unified payments interface) system, according to the RBI. With this, the scope of UPI has been expanded by inclusion of credit lines as a funding account, the central bank said in a circular to SCBs (excluding Payment Banks, Small Finance Banks and Regional Rural Banks).

The central bank, in its statement on development and regulatory policies (April 06,2023), said it will expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks. At present, savings account, overdraft account, prepaid wallets and credit cards can be linked to 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 release added.

This can reduce the cost of such offerings and help in development of unique products for Indian markets.

The UPI is a robust payments platform supporting an array of features. Presently it handles 75% of the retail digital payments volume in India. The UPI system has been leveraged to develop products and features aligned to India’s payments digitisation goals. Recently, RuPay credit cards were permitted to be linked to UPI. At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.

Can we expect Unicard on Rupay ?

 

[Abhishek012]

Reward kitna milega bhai vo bata
But on a serious note this will enable credit accessibility to the last man hope banks don’t exploit the uninitiated and have reasonable interest rates

I think we will apply for "Credit on UPI" in the same way as we apply for credit card.

Banks will sanctioned some amount and then we need to open any UPI app,

We will get 3 options -

1) bank account link UPI
2) RuPay credit card on UPI
3) Credit lines on UPI (they also called funding account)

We will choose Credit lines on UPI >> Credit lines on UPI issuer banks name and link to UPI.

Now we will ask me how to set UPI PIN then i dnt know, banks will figure out something or Aaadhar otp based UPI PIN set etc.

We will also get 45 to 50 days time period to repay our Credit lines on UPI spend.

Note - this is my theory, exactly i dnt know how it will work.

 

[Dharm]

I think we will apply for "Credit on UPI" in the same way as we apply for credit card.

Banks will sanctioned some amount and then we need to open any UPI app,

We will get 3 options -

1) bank account link UPI
2) RuPay credit card on UPI
3) Credit lines on UPI (they also called funding account)

We will choose Credit lines on UPI >> Credit lines on UPI issuer banks name and link to UPI.

Now we will ask me how to set UPI PIN then i dnt know, banks will figure out something or Aaadhar otp based UPI PIN set etc.

We will also get 45 to 50 days time period to repay our Credit lines on UPI spend.

Note - this is my theory, exactly i dnt know how it will work.

Slice and Unicard will get benefitted from this news, as recently Slice announced to shut it's prepaid card on 30 Sep 23.

So now it can get new customers via UPI route.

 

[Abhishek012]

Slice and Unicard will get benefitted from this news, as recently Slice announced to shut it's prepaid card on 30 Sep 23.

So now it can get new customers via UPI route.

Slice and Unicard will easily launch RuPay credit card on UPI.

Credit lines on UPI is good for low income users, tier 2, tier 3 and other small cities user.

Those who dnt have any credit score yet, Bank will pre-sanctioned credit lines on UPI with just Rs2000 or Rs5000 amount and they will first time build their credit score.

Once the bank knows that they are paying their bills on time. Banks will offer them credit cards and those who like credit lines on UPI feature they will choose RuPay credit cards on UPI too.

 

[Ad.Astra]

G

RBI allows operation of pre-sanctioned credit lines at banks through UPI​

Scheduled Commercial Banks (SCBs) can now enable payments through a pre-sanctioned credit line for individuals, with prior customer consent, for transactions using the UPI (unified payments interface) system, according to the RBI. With this, the scope of UPI has been expanded by inclusion of credit lines as a funding account, the central bank said in a circular to SCBs (excluding Payment Banks, Small Finance Banks and Regional Rural Banks).

The central bank, in its statement on development and regulatory policies (April 06,2023), said it will expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks. At present, savings account, overdraft account, prepaid wallets and credit cards can be linked to 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 release added.

This can reduce the cost of such offerings and help in development of unique products for Indian markets.

The UPI is a robust payments platform supporting an array of features. Presently it handles 75% of the retail digital payments volume in India. The UPI system has been leveraged to develop products and features aligned to India’s payments digitisation goals. Recently, RuPay credit cards were permitted to be linked to UPI. At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.

Good news for fintech companies I guess. They may, in partnership with banks, launch credit line products for consumers who are not issued credit cards due to issuing policy or who do not want credit cards.