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Zero Balance, Still UPI Payment! UPI to Run on Credit Limit, Not Bank Balance Soon
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News18•21-09-2026, 17:55
Zero Balance, Still UPI Payment! UPI to Run on Credit Limit, Not Bank Balance Soon
- •NPCI will soon introduce a credit limit facility on UPI, enabling payments even with zero bank balance.
- •Banks will provide pre-sanctioned credit lines to customers, which can be used for UPI transactions.
- •UPI credit lines will be of two types: interest-free (CLIF) and interest-bearing (CLIB), with CLIF functioning like a credit card billing cycle.
- •Eligibility and credit limits will be determined by banks based on customers' financial history, transaction records, and credit scores.
- •This facility will be useful in emergencies and can be used for merchant payments, EMIs, and UPI AutoPay, with some restrictions on P2P transfers.
Key Questions Answered
Banks and apps have until December 15, 2026, to activate the entire UPI credit line system following NPCI's circular instructions issued on September 18, 2026.
The available credit types include an interest-free credit line (CLIF) featuring a fixed grace period similar to a credit card billing cycle, and an interest-bearing credit line (CLIB) that functions like a personal loan where interest accrues immediately.
Users cannot utilize the UPI credit line for UPI Lite, UPI Circle, international payments, or personal peer-to-peer (P2P) money transfers using an interest-free credit line.
