If you use UPI, then there is good news for you. A big change is coming regarding the overdraft facility through UPI. Now, the credit line will be directly linked to UPI. After this, you will be able to easily withdraw money from your loan account using UPI.
The National Payments Corporation of India (NPCI) issued a circular on July 10, 2025. In this circular, new guidelines have been shared for linking pre-approved credit lines to UPI.
According to the circular, starting next month (August), you will be able to use the bank’s pre-approved credit line directly through UPI. Till now, this amount could only be used to buy goods. But now, you can use the credit line through UPI not only for shopping but also to withdraw cash, send money to someone, and make payments to small shopkeepers.
Earlier, this rule was different. Payments from UPI credit lines were allowed only at shops. But now, after linking the loan overdraft with UPI, more features will be available.
Loan Account Will Be Linked to UPI
Under the new rule, UPI users will now be able to use fixed deposits, shares, bonds, property, gold, or personal and business loan overdrafts by linking them to UPI. In simple words, you will be able to make payments directly from your loan account using third-party UPI apps like Paytm, PhonePe, and Google Pay.
Service Starts Next Month
NPCI has asked all UPI member banks and credit line providers to start this service by 31 August 2025. This means crores of UPI users will soon benefit from this new feature.
What is a Credit Line?
A credit line is a type of loan approved by a bank or financial institution based on your income and credit score. You can link your credit line account to UPI and use it for payments easily.