Pre Sanctioned Credit Lines On Upi How Does That Work

UPI has shifted to the digital payment segment and changed the nature of payments in India. The number of transactions made via UPI has increased every day. The announcement by the RBI on April 6, 2023, has further strengthened the digital payment sector. It states that sanctioned credit lines can be accessed through UPI via banks.

What Is A Credit Line?

  • The credit line is a loan facility that is available from banks.
  • It is highly adaptable and is constantly changing.
  • Users will receive a pre-determined borrowing limit, similar to a credit card
  • The banks that provide the credit lines must conduct a primary verification of the accounts of individuals.
  • This will allow them to determine the pre-approved credit limit available through these accounts.
  • Credit lines are much easier to obtain than traditional loans.
  • However, the rates of interest on credit lines are higher than average.
  • There are a variety of credit lines that customers, such as credit cards, small credit lines, business credit lines, etc can access.

RBI Announcement on Pre-Sanctioned Credit Lines

  • Credit lines that have been sanctioned before UPI are available to UPI customers.
  • This will facilitate more incredible innovation via UPI.
  • Credit for time-sensitive transactions will be accessible until the end of the mile.
  • UPI has played a significant part in driving India towards a digital economic model.
  • This will help ensure financial inclusion and increase access to credit for all groups of people who are part of the economy.

How Will It Benefit Users?

  • Customers can pay for their purchases without carrying several credit cards.
  • This will also modernize both the digital lending market as well as it will also update the structure of the formats.
  • It will allow those not banked to get credit and broaden their financial opportunities.
  • This will open new growth opportunities for banks as well as other institutions of finance. This will aid in increasing financial knowledge and inclusion in the financial sector.

How Will A Credit Line Through UPI Work?

  • The applicants must submit a formal application with the bank or bank.
  • This is comparable to getting traditional loans from a lender.
  • After applying the financial information, the lender will carefully check the person applying for credit.
  • This will decide the maximum amount that could be provided as a pre-sanctioned amount.
  • Creditors will confirm information such as the applicant’s income history, history of borrowing as well as repayment history. An applicant’s credit rating.
  • The process is similar to the way traditional loan applications are verified.
  • After completing the verification process, the users will be granted the sanctioned credit line based on their financial situation.
  • The user will obtain and use the credit line for transactions with banks through UPI.


UPI is now an increasingly popular way of making payments in India. According to estimates, approximately 75% of all transactions at the retail level in the country are processed by UPI. The percentage will rise even more because of the power of UPI and the ease and ease it provides for making transactions. The reason for introducing approved credit lines via UPI is to give the benefits of timely credit to people who live in remote areas of India. The launch will also help the financial industry create more secure channels and better products that benefit the consumer.


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