The Reserve Bank of India has amended its directions on commercial bank credit facilities to set a uniform regulatory approach for credit products linked to specific payment instruments, including pre-sanctioned credit lines used through the Unified Payments Interface. The core clarification is that prudential treatment must be based on the nature of the underlying credit facility, regardless of the delivery channel, payment instrument or technology used. The amendment inserts a new chapter into the 2025 directions. It requires any credit facility designed to be linked to a specific payment mode to be covered in the bank's credit policy and to comply with all applicable regulatory requirements. It also clarifies that banks may offer only those facilities that are otherwise permitted under existing regulations, and that these instructions operate in addition to any other legal or regulatory requirements that apply to transactions executed through payment mechanisms.
Reserve Bank of India2026-06-23
Reserve Bank of India clarifies prudential treatment for credit facilities linked to payment instruments including UPI credit lines
The Reserve Bank of India has amended its credit facility directions to clarify that prudential treatment for products linked to payment instruments, including pre-sanctioned UPI credit lines, depends on the underlying credit facility rather than the payment channel or technology. Banks must include such products in their credit policies and ensure they comply with all applicable regulations. Only credit facilities already permitted under existing rules may be offered in these arrangements.