Regulatory Alerts2026-06-23
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Reserve Bank of India (Commercial Banks – Credit Facilities) Fourth Amendment Directions, 2026
The Amendment Directions insert a new Chapter IIA into the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025, establishing rules for credit facilities linked to specific payment instruments. The new provisions mandate that the prudential treatment of underlying credit facilities, including pre-sanctioned credit lines for UPI transactions, is determined solely by the nature of the facility and applicable prudential norms, regardless of the delivery mode or technology. Banks are required to include terms and conditions for credit facilities linked to specific payment modes in their credit policies and ensure compliance with all other applicable regulatory requirements. The directions clarify that only credit facilities permitted under extant regulations can be offered through such arrangements and remain subject to other laws governing payment mechanisms.
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( 472 kb ) Reserve Bank of India (Commercial Banks – Credit Facilities) Fourth Amendment Directions, 2026
RBI/2026-27/152 DOR.STR.REC.128/21-07-001/2026-27
June 23, 2026
Reserve Bank of India (Commercial Banks – Credit Facilities) Fourth Amendment Directions, 2026
Please refer to Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025 (hereinafter referred to as ‘the Directions’).
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In view of circular on “Operation of Pre-Sanctioned Credit Lines at Banks through Unified Payments Interface (UPI)” dated September 04, 2023 , which allow banks to enable transactions using the UPI system through a pre-sanctioned credit line with prior consent of the customer, it is imperative to ensure consistency in regulatory compliance towards such products across banks.
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Accordingly, in exercise of the powers conferred by the sections 21 and 35A of the Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
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These Amendment Directions modify the Directions as under:
After Chapter II of the Directions, a new Chapter IIA shall be inserted as below:
Chapter IIA: Credit Facilities Linked to Specific Payment Instruments
5A. Notwithstanding the mode / channel of credit delivery or the type of payment instrument and / or underlying technology used for its disbursement, the prudential treatment of an underlying credit facility, including pre-sanctioned credit lines meant for payment transactions through UPI, shall be solely determined by the nature of the underlying credit facility, governed in terms of the applicable prudential norms.
5B. Any credit facility which is designed to be linked to a specific payment mode, shall have its terms and conditions included in the bank’s credit policy and shall comply with all other applicable regulatory requirements.
Explanation – For avoidance of any doubt, it is clarified that only such credit facilities as are otherwise permitted to be sanctioned by a bank under the extant regulations, can be offered as part of any such arrangement.
5C. The above instructions shall be without derogation to the provisions of any other law or regulation in relation to transactions effected through any payment mechanism.
(Vaibhav Chaturvedi) Chief General Manager
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