UPI Now, Pay Later: The use of UPIP is increasing rapidly in the country. Through this facility, users can transfer money anywhere in seconds, but for this it is necessary to have sufficient amount in your bank account. Even if you do not have sufficient funds in your bank account, you can now make payments through your UPI. Because the Reserve Bank of India has paved the way for transfers from pre-approved credit lines to banks through the UPI network.
RBI issued notification
Till now, UPI users could only link their savings accounts, overdraft accounts, prepaid wallets and credit cards to the UPI system. However, RBI has now allowed you to use your pre-approved credit line to conduct UPI transactions. According to the RBI notification dated September 4, 2023, banks can provide credit line facility to UPI users, allowing users to spend from a pre-approved credit line and settle the balance later.
Under this facility, with the prior consent of the customer, individuals are enabled to make payments through a pre-approved credit line issued by a scheduled commercial bank for transactions using the UPI system. This empowers you to link credit lines issued by banks to your UPI account, facilitating seamless payments. Pre-approved credit lines essentially involve pre-approved credit that banks provide to both internal deposit customers and potential non-customers. On the basis of customers whose loan eligibility has been assessed by the Bank on the basis of data analysis done.
Called UPI Now, Pay Later by some banks, this feature allows individuals to spend from this pre-approved credit line and settle their balance later. HDFC Bank and ICICI Bank have already launched credit lines – like HDFC UPI Now Pay Later and ICICI Pay Later. Currently HDFC and ICICI Bank have launched UPI Now Pay Later service. Depending on the eligibility of the account holder, the maximum credit limit of both the banks is Rs. 50,000 has been kept. RBI has also asked all other banks to add this facility with UPI.