Small Finance Banks allowed to transfer loan amounts via UPI

The Reserve Bank of India (RBI) has decided to permit Small Finance Banks to extend pre-sanctioned credit lines through the UPI. “This will further deepen financial inclusion and enhance formal credit, particularly for ‘new to credit’ customers,” Governor Shaktikanta Das said while announcing additional measures after his monetary policy statement. Credit line on UPI was first introduced in September 2023 and was made available through Scheduled Commercial Banks (SCBs).