The capability aims to let eligible borrowers use sanctioned credit accounts through UPI for payments to vendors and suppliers.
NPCI showcased Credit on UPI capabilities at Global Fintech Fest 2026, including use cases involving government-backed credit schemes such as the Pradhan Mantri Mudra Yojana and Kisan Credit Card.
The model allows eligible borrowers to link participating credit accounts to a UPI application and use sanctioned credit for supported payments. This can make credit more usable in everyday business activity, including payments to vendors and suppliers, without requiring the borrower to withdraw cash first.
Such a facility could be relevant to small merchants and agricultural customers who need practical access to working capital. Its value will depend on participating-bank coverage, eligibility rules, repayment terms and the ability of users to understand when they are spending borrowed funds.
Credit access must be accompanied by responsible borrowing, clear disclosure of charges and safeguards that prevent users from confusing a credit line with a deposit balance.
BFSI NXT perspective: Linking credit to everyday payment rails may improve usability, but financial inclusion must remain responsible and transparent.
Related reading
- NBFCs Must Turn Digital Lending into Intelligent, Responsible Credit
- NPCI Showcases MyUPI and UPI Tap & Pay
