RBI Approves Pre-Approved Loan Through UPI

08 Sep, 2023 Author: Ayushee Joshi

UPI Loan Service: While the country’s inclination towards digital services has grown, with UPI transactions being open to everyone, the Reserve Bank of India (RBI) has now introduced a new service to customers. Previously, customers could only make transactions using the deposited money via UPI; however, the central bank announced a facility in which pre-approved loan facilities given by banks for transactions can also be conducted via the UPI account, resulting in an increase in people’s access to credit lines. Currently, UPI may be linked to savings accounts, overdraft accounts, prepaid wallets, and credit cards.

How Does Pre-Approved Loan Works

Customers can make payments on a Pre-Approved Loan even if they do not have a credit card. It’s the same as applying for a loan from a bank, but in a Pre-Approved Loan, you can apply for a loan through an app. The bank will provide you with a pre-approved credit line when it has been approved. You can then utilise it in accordance with your needs. According to the RBI, a pre-approved credit line provided by a listed commercial bank can be used to make the payment over the UPI system with the customer’s prior approval.