On Monday, the Reserve Bank of India (RBI) announced that banks' pre-approved credit limits given for transactions would become part of the Unified Payments Interface (UPI) System.

Prior to the expansion of the UPI System, only deposits could be processed.The Reserve Bank suggested adding the ability to transfer to and from pre-sanctioned credit lines at banks to the Unified Payments Interface on April 6, 2023.

At the moment, UPI can be connected to checking accounts, savings accounts, overdraft accounts, prepaid debit cards, and credit cards.

Reserve Bank announced in a circular titled "Operation of Pre-Sanctioned Credit Lines at Banks through UPI" that credit lines will now be eligible for funding through UPI.

The RBI has stated that the UPI system can now be used for transactions involving pre-approved credit lines given by Scheduled Commercial Banks to people with the express permission of the individual customer.

"Banks may, in accordance with policy established by their board of directors, impose restrictions on the use of such credit lines. Credit limit, credit length, interest rate, etc., are only some of the terms that may be negotiated," the announcement continued.

This has the potential to lessen the price of such offers and encourage the creation of novel products for sale in the Indian market.

Apple MacBook Air Laptop M1 chip, 13.3-inch/33.74 cm Retina Display, 8GB RAM, 256GB SSD Storage

Apple 2023 MacBook Air Laptop with M2 chip: 38.91 cm (15.3-inch) Liquid Retina Display

The UPI is an advanced system for doing financial transactions, with many useful options. Currently, it processes 75% of all digital payments made in Indian stores. Products and features that support India's efforts to digitize its payment systems have been developed with the help of the UPI system. UPI integration with RuPay cards was only recently made possible. Currently, UPI enables transactions between bank deposit accounts, with pre-paid devices such as wallets serving as an intermediary.

Also read :- Unihealth Consultancy IPO to open on September 8, to raise Rs 56.55 crore

In August, UPI transactions surpassed $10 billion, demonstrating the widespread adoption of this method for instantaneous money transfer via mobile devices. According to PTI, UPI transactions increased to 9.96 billion (996.4 crore) in July from 9.33 billion in June.