The payment system through UPI will be linked to the pre-approved loan service issued by banks. With this, banks will be able to make payments even if there is no money in the customer’s account.
National Payment Corporation of India has started credit line service for UPI transactions. This has also been approved by RBI. Under this, the payment system through UPI will be linked to the pre-approved loan service issued by the banks. With this, banks will be able to make payments even if there is no money in the customer’s account.
RBI had proposed to expand the scope of UPI in April this year. Under this, it was said to approve payment through pre-approved loans in banks. Currently, savings accounts, overdraft accounts, prepaid wallets and credit cards can be linked to UPI. Now credit line service has also been included in the scope of UPI.
What is credit line facility?
This will be a kind of loan, which will be pre-approved by the banks for their customers. In this, like a credit card, a fixed amount will be fixed for the customer to spend. Customers will be able to use this amount for payment through UPI if needed. The bank will charge interest on the amount spent.
Will have to apply for service
- To avail the credit line facility, the customer will have to apply to the bank.
- Banks will decide the loan limit considering credit history and personal details. This limit may be different for every person.
- Banks will charge interest according to the amount spent by the customer and the number of days. No interest will be charged on the entire amount.
- To start this service, it is necessary to have an account in the concerned bank. Banks may charge processing fees and GST for the service.
- If the amount is not spent in a month then interest will not be charged on it.
Link UPI app like this
- Open UPI app in your mobile. After this select the option of new pay letter account.
- Now select the bank in which the credit line service is done. Then select UPI PIN. After this you will be able to make payment.
Such benefits to customers
- Customers will not have to keep separate cards. You can make payment through UPI through mobile only.
- It takes time to get a credit card. The credit line will be approved immediately.
