Archive · 19 Jan 2026
UPI Credit Lines: Interest-Free Periods to Boost Adoption
India is working on adding credit lines to UPI, the country's popular payment system.
These credit lines will be like credit cards, allowing people to borrow small amounts of money, up to ₹5,000, and pay it back later without interest if they repay on time.
This is expected to help more people, especially those who can't get traditional credit cards, access credit easily.
However, banks are being careful because they've had problems with similar products in the past.
They're also waiting for clear rules from the government.
Once everything is in place, more banks are expected to offer these credit lines, making it easier for people to borrow and pay back money using UPI.
India's retail payments body is in talks with lenders to introduce credit lines on UPI with interest-free periods.
Credit lines as low as ₹5,000 are planned, aiming to widen access to credit for those who struggle to qualify for traditional credit cards.
Regulatory clarity and the introduction of interest-free periods are expected to boost the uptake of UPI-linked credit lines.
Only a handful of banks currently offer UPI credit lines due to regulatory uncertainty and the lack of interest-free periods.
Banks are cautious about UPI-linked credit lines due to past experiences with similar products like BNPL, which saw elevated delinquency and loss rates.
- Who
- India's retail payments body and lenders
- What
- Introducing credit lines on UPI with interest-free periods
- When
- Talks ongoing; implementation expected soon
- Where
- India
- Why
- To widen access to credit and lower costs for lenders and borrowers
- Minimum Credit Line
- ₹5,000
- Interest-Free Period
- Up to 45 days
- UPI Users
- 491 million individuals and 65 million merchants
- Estimated UPI Credit Line Users
- 300,000 to 400,000
- MDR for Interest-Free Lines
- 1.2%