Mumbai: The Reserve Bank has granted that the UPI System will also include pre-sanctioned credit lines issued by banks for transactions. Earlier, only the deposited amount could be transacted through the UPI System.
In April, the RBI had initially proposed to expand the scope of the UPI by enabling transfer to/from pre-sanctioned credit lines at banks. Currently, savings accounts, overdraft accounts, prepaid wallets and credit cards can be linked to this UPI system. The scope of UPI is now being expanded by including credit lines as a funding account.
“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 circular said. This can not only reduce the cost but also help in the development of unique products for Indian markets.
UPI transactions crossed the 10-billion-mark in August up from 9.96 billion (996.4 crore) in July and 9.33 billion in June.
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