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New Delhi. An essential transaction to UPI is going to be a big change soon. Under this, the loan amount already sanctioned in UPI Wallet will now be used only for the work for which the bank had sanctioned the loan. It will not be used in other work. The new rule will be applicable from 31 August 2025.

The National Payment Corporation (NPCI) has recently issued a circular in this regard. It states that now the customers will be used for the purpose for which the bank will approve this credit line on UPI.

This means that if someone has given this facility for a particular need, it will have to be used for the same need. NPCI has directed all banks, payment companies, and app companies to implement these changes.

Hence a change made
The facility of adding credit line on UPI had been given earlier, but its control and monitoring system was weak. Many times it was seen that customers do not use this loan for the purpose for which this approval is received. This was seen to affect both banking system and consumer security. NPCI says that new rules are being implemented to prevent misuse of this facility.

What is credit line facility
Earlier, only savings accounts, wallets or RuPay Credit Cards could be added through UPI, but later the credit line facility was also added. It is a kind of loan, which is already approved by banks to its customers. In this, a fixed amount is fixed for the customer spending like a credit card. If there is no amount in the user’s savings account or UPI wallet, then he can use this loan amount for payment when needed. Banks charge interest only on the amount spent.

What are the new rules
1. Correct use of debt: The loan should be used for the same work for which the bank has approved. For example, if someone has taken a loan for studies, then he will not be able to spend it anywhere else from UPI.
2. The role of the bank will be important: The bank will decide which transaction should be approved and who is not. This decision will be taken by the bank keeping in mind its policy and the purpose of that loan.
3. Monitor all transactions: If the customer uses that credit line for the wrong purpose, the bank will be able to stop it. This system is considered to be the biggest feature of this new system.
4. There will be change in the app: All banks, UPI payment service providers and app companies will have to add new codes so that the use of interest line is easy.