RBI says UPI-linked credit lines must follow same rules as traditional loans; Closes regulatory arbitrage

The Reserve Bank of India has mandated uniform prudential treatment for all credit facilities, including those disbursed via UPI. This move closes a regulatory loophole allowing banks to offer lighter treatment to UPI-linked credit. Now, the nature of the credit, not the technology, dictates capital adequacy and provisioning, ensuring consistent regulation across all credit products.