You know how you use UPI for everything from your morning coffee to online shopping? Well, it’s about to get even more powerful! Starting August 31, 2025, you’ll be able to link your pre-approved credit lines – like those backed by your fixed deposits, shares, or even overdraft facilities – directly to your UPI apps.
What does this mean for you?
Right now, you can mostly use these credit lines for payments to businesses. But under the new rules from the National Payments Corporation of India (NPCI), you’ll also be able to:
- Withdraw cash
- Send money to friends and family
- Pay small merchants
Think of it: no more juggling different apps or methods to access your pre-sanctioned funds. Whether you’re scanning a QR code, making a contact-based payment, or transferring money, your credit line will be just a tap away on apps like Google Pay, PhonePe, and Paytm.
A smarter way to spend
There’s an important new layer of control: your bank will ensure the money from these credit lines is used for its intended purpose. For instance, if you have a loan for medical expenses, the bank will approve related payments but might decline unrelated purchases. This means banks will set the terms, approve or reject transactions, and make sure funds are used responsibly.
NPCI has given all banks, payment providers, and app developers until August 31, 2025, to update their systems. While rules might vary slightly between lenders, this change promises to make accessing credit for daily needs and business operations much more seamless.
This is a game-changer for how we access and manage credit, making it simpler and more integrated into our everyday digital lives!