The Reserve Bank of India (RBI) has allowed operation of pre-sanctioned credit lines at banks through Unified Payments Interface (UPI). RBI Governor Shaktikanta Das made this announcement while announcing the decisions of the bi-monthly monetary policy committee meeting on April 6,2023. "Scope of UPI to be expanded, by permitting operation of pre-sanctioned credit lines at banks, through UPI. This will further encourage innovation," said Das.

"At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets. It is now proposed to expand the scope of UPI by enabling transfer to/from pre-sanctioned credit lines at banks, in addition to deposit accounts. In other words, UPI network will facilitate payments financed by credit from banks," RBI said.

This can reduce the cost of such offerings and help in development of unique products for Indian markets. Detailed instructions in this regard will be issued separately, the regulator said.