UPI has brought a change to the digital payments segment and altered the face of payment in India. The volume of transactions carried out through UPI has been expanding on a daily basis. The announcement made by the RBI on 6th April, 2023 has further enhanced the digital payment segment. The announcement states that pre-sanctioned credit lines can be availed on UPI through banks. 

What Is A Credit Line?

  • A credit line is a lending facility that can be availed from banks 
  • It is highly flexible and revolving in nature 
  • The users will get a pre decided borrowing limit similar to the one in credit cards
  • The banks providing the credit lines will have to complete basic verification of the personal accounts. 
  • This will help them to decide the pre-sanctioned credit limit that can be availed by such accounts.
  • Credit lines are easier to avail compared to traditional loans 
  • But, the interest rates on the credit line are on the higher side.
  • There are different types of credit lines that can be availed by users like credit cards, small credit lines, business credit lines, etc.

RBI Announcement on Pre-Sanctioned Credit Lines

  • Pre-sanctioned credit lines on UPI will be available for UPI users. 
  • This will enable enhanced innovation through UPI
  • Timely credit will be available till the last mile
  • UPI has played a major role in pushing India toward a digital economy. 
  • This will ensure financial inclusion and extend the availability of credit to all segments of people in the economy. 

How Will It Benefit Users?

  • Customers can make payments without having to carry multiple credit cards
  • This will also modernize the digital lending space and the BNPL format. 
  • It will make it easier for the unbanked segment to access credit and expand their financial horizons. 
  • It will open up new areas of growth for banks and other financial institutions. This will in turn help in promoting financial literacy and financial inclusion.

How Will A Credit Line Through UPI Work?

  • The users will have to put a formal application to the lender or the bank
  • This is similar to getting a traditional loan from the lenders
  • After submission of the application, the financial records of the applicant will be thoroughly verified by the lender 
  • This is to determine the amount of credit line that can be offered as a pre-sanctioned limit. 
  • Lenders will verify details like income history, borrowing history, repayment history, and the applicant’s credit score.
  • This process is similar to how a traditional loan application will be verified
  • After doing the verification, users will be granted the pre-sanctioned credit line  depending on their personal financial details. 
  • This credit line can then be obtained and utilized by the users for their financial transactions via UPI. 


UPI has become one of the most accepted modes of payment in India. According to an estimate, about 75% of the retail digital transactions in the country are done through UPI. This will increase even further due to the stronghold of UPI, and the simplicity and convenience it offers to perform transactions. The purpose of introducing the pre-sanctioned credit lines through UPI is to provide the benefit of timely credit to people even in the remotest corner of India. This launch also helps the payment industry to create safer channels and more innovative products for the end consumer. 

FAQS Pre-Sanctioned Credit Lines on UPI – How Does that Work

  1. What is the credit line on UPI?

This is a pre-approved borrowing limit that a borrower can obtain at any time. It is like a credit payment, and under this, the end-consumer can repay the loan with interest at a later date. The users of UPI will have to apply to the banks to obtain this facility. 

  1. How do I get a credit line on UPI?

The lender has to check the financial details of the borrower like income, credit score, borrowing history, etc. Then, he has to decide on the credit line limit. After this process, the borrowers can avail of the funds approved under the credit line