UPI Now, Pay later: HDFC Bank & ICICI Bank Start Credit on UPI

New Delhi: In a game-changing move, the Reserve Bank of India (RBI) has opened up new possibilities for UPI users by allowing them to utilize pre-sanctioned credit lines offered by banks for seamless transactions through the UPI network. This development, announced on September 4, 2023, empowers individuals to link these bank-issued credit lines to their UPI accounts.

Previously, UPI users could only connect their savings accounts, overdraft accounts, prepaid wallets, and credit cards to the UPI system. However, with the RBI’s latest notification, banks can now provide a credit line facility to UPI users, enabling them to make payments using pre-sanctioned credit lines and settle the dues later.

This innovative feature, often referred to as “UPI Now, Pay Later,” is already being offered by pioneering banks like HDFC Bank and ICICI Bank under the names HDFC UPI Now Pay Later and ICICI PayLater, respectively. These credit lines essentially function as overdraft facilities, accessible through various UPI-based apps, including popular platforms like Google Pay and MobiKwik.

The maximum credit line offered by both HDFC Bank and ICICI Bank is set at Rs 50,000, subject to the account holder’s eligibility. These pre-sanctioned credit lines are granted based on extensive data analytics conducted by banks, encompassing their existing deposit customers as well as potential non-customers whose creditworthiness has been thoroughly assessed.