meta_id 3262626

On June 23, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Commercial Banks – Credit Facilities) Fourth Amendment Directions, 2026, amending the Commercial Banks – Credit Facilities Directions, 2025. The amendment introduces a new Chapter IIA addressing credit facilities linked to specific payment instruments, particularly pre-sanctioned credit lines offered through the Unified Payments Interface (UPI). The RBI issued the amendment to ensure regulatory consistency across banks offering credit products through UPI. This follows the RBI's September 4, 2023 circular permitting banks to enable transactions using the UPI system through pre-sanctioned credit lines with prior customer consent. The amendment clarifies that the prudential treatment of any underlying credit facility, including pre-sanctioned credit lines for payment transactions through UPI, shall be determined solely by the nature of the underlying credit facility and governed by applicable prudential norms, regardless of the delivery mode, channel, or payment instrument used. Under the new directions, any credit facility designed to be linked to a specific payment mode must have its terms and conditions included in the bank's credit policy and comply with all applicable regulatory requirements. The RBI clarified that only credit facilities otherwise permitted to be sanctioned by banks under extant regulations can be offered as part of such arrangements. The amendment applies to all commercial banks offering credit facilities linked to payment instruments and affects institutions providing pre-sanctioned credit lines through digital payment mechanisms. The directions took effect on June 23, 2026, and commercial banks must ensure compliance with the new prudential treatment requirements for credit facilities linked to specific payment instruments.