look news india
There is going to be a major change in India’s digital payment system. The National Payments Corporation of India has announced a new rule on 10 July 2025, under which you will now be able to link your credit line to UPI and will be able to pay directly from the loan account. This new feature will be applicable from 31 August 2025, which will make users more ease in digital transactions.
What is a credit line on UPI?
According to the NPCI website, the pre-approved credit line on UPI is a facility through which you can link the pre-approved credit line received from your bank to UPI and use it for immediate transactions. The credit line is a fixed amount given by a bank or financial institution, which is fixed on the basis of your income and credit. This loan can be taken on securities like FD, shares, bonds, assets or gold.
When will this facility start?
This new rule will be effective from August 31, 2025. NPCI has asked all UPI members banks, payment service providers (PSPs) and third party app providers (TPAP) to implement these changes before 31 August.
Who will benefit?
If you have taken a personal loan, overdraft or credit line from a bank, you can connect it with UPI for fast and easy transactions. Small traders whose monthly UPI transactions are less than Rs 50,000 can perform P2PM (Person to Person Merchant) transactions.
Business owners will now be able to pay directly from their loan accounts through UPI, which will eliminate the complex process of bank transfer.
What will be the benefit of this?
This new feature will make digital pay even easier and faster. For example, if you have taken a business loan for your shop and you have to pay Rs 2 lakh to a contractor, now you can pay directly through the UPI from the loan account. This will end the hassle of bank transfer.
What are the new rules?
P2P and P2PM transactions: Earlier UPI was used only for P2M (individual to business) transactions. Now P2P (person to person) and P2PM transactions will also be possible.
Cash withdrawal: Cash withdrawal facility from credit line will also be available through UPI.
Merchant Code (MCC): Banks and PSPs will need to add more MCC to support a variety of credit line transactions.
Safe transaction: A separate UPI PIN has to be set for credit line, which will increase security.
How do you link credit line?
Download the app: Download UPI app from Google Play Store.
Registration: Complete the registration process in the app and select the ‘Credit Line’ option.
Bank Selection: Select your bank name from the drop-down menu.
Credit Line Link: A credit line will appear on your registered mobile number. Choose and confirm it.
UPI PIN: Generate UPI PIN using Aadhaar or Debit Card.
precautionary measures
Do not share your UPI pin with anyone.
Use different pins for credit line and savings accounts.
Do not share the OTP received during registration.
Follow the credit limit fixed by the bank.
