Definition
Credit Line on UPI
Credit Line on UPI lets banks offer pre-sanctioned credit that customers can draw and spend directly through UPI, blending short-term credit with everyday UPI payments.
Credit Line on UPI allows a bank to link a pre-approved credit line to your UPI, so you can pay merchants or make transactions on borrowed funds rather than your account balance, repaying as per the line's terms.
It extends formal credit through the familiar UPI interface, potentially widening access to small-ticket credit. The bank sets the limit, interest and repayment terms, and the facility is governed by RBI's lending norms, including transparent disclosure.
Because it is credit, undrawn discipline matters: interest and charges apply on usage, so it should be treated like any borrowing, not free spending money.
Related terms
- Buy Now Pay Later (BNPL)Buy Now Pay Later is a short-term financing option at checkout that lets you receive goods immediately and pay later, either in one deferred payment or in instalments.
- RuPayRuPay is India's home-grown card payment network, built by NPCI, that powers debit, credit and prepaid cards as a domestic alternative to international networks.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.