The Reserve Financial institution of India (RBI) Monday stated the Unified Funds Interface (UPI) System may even embrace pre-sanctioned credit score strains issued by banks for transactions.
Earlier, solely the deposited quantity might be transacted by means of the UPI System.
On April 6, 2023, the Reserve Financial institution proposed to broaden the scope of the Unified Funds Interface by enabling switch to/from pre-sanctioned credit score strains at banks.
Presently, financial savings accounts, overdraft accounts, pay as you go wallets and bank cards might be linked to UPI.
The scope of UPI is now being expanded by the inclusion of credit score strains as a funding account, Reserve Financial institution stated in a round on ‘Operation of Pre-Sanctioned Credit score Strains at Banks by means of UPI’
“Underneath this facility, funds by means of a pre-sanctioned credit score line issued by a Scheduled Industrial Financial institution to people, with the prior consent of the person buyer, are enabled for transactions utilizing the UPI System,” the RBI stated.
“Banks could, as per their board authorized coverage, stipulate phrases and circumstances of use of such credit score strains. The phrases could embrace, amongst different gadgets, credit score restrict, interval of credit score, price of curiosity, and so on,” the discharge added.
This may cut back the price of such choices and assist in improvement of distinctive merchandise for Indian markets.
The UPI is a strong funds platform supporting an array of options. Presently it handles 75% of the retail digital funds quantity in India. The UPI system has been leveraged to develop merchandise and options aligned to India’s funds digitisation targets. Just lately, RuPay bank cards had been permitted to be linked to UPI. At current, UPI transactions are enabled between deposit accounts at banks, typically intermediated by pre-paid devices together with wallets.
UPI, used for instant cash switch by means of cell gadgets around the clock, transactions crossed the 10-billion-mark in August. The variety of UPI transactions in July was 9.96 billion (996.4 crore) and 9.33 billion in June, PTI reported.
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Up to date: 04 Sep 2023, 10:30 PM IST
Supply: Live Mint