India, June 25 -- A few years after launching credit on UPI, the RBI has now reiterated the regulatory framework governing credit on UPI, bringing the rules for pre-sanctioned credit lines in line with existing lending norms for banks.

Under the updated guidelines, the central bank has mandated that all UPI-linked credit lines follow the exact same prudential norms and regulations as traditional loans. This eliminates the regulatory loopholes that previously allowed banks to treat UPI credit products differently depending on the platform or app.

The RBI has mandated that any credit facility linked to a specific payment mode be formally integrated into the bank's internal credit policy. Now, lenders, who have already secured pre-requisit...