UPI Transactions: RBI provides way to safeguard your bank account, avail free credit period


Apart from making Unified Payments Interface (UPI) payments by linking savings and current accounts through debit cards, you can now use your credit card also on the digital platform as the Reserve Bank Of India (RBI) – in its monetary policy meet on Wednesday – has allowed linking of RuPay Credit Card with UPI.

With its ease of handling, UPI is fast becoming one of the most favoured mode making payments for both online and offline transactions, logging as many as 594.6 crore transactions amounting to whopping Rs 10.40 lakh crore in the month of May 2022 alone.

So far UPI users were able to pay out of the balance available in their savings or current accounts. To avail credit period for buying goods or availing services, users had the option to link their accounts having overdraft facilities only.

However, there are some instances, where with slight mistake or carelessness of the users, the bank accounts linked to UPI of the users got hacked, leading to the accounts getting emptied by the fraudsters.

The RBI move would reduce the risk of bank accounts of UPI users getting emptied by the cyber fraudsters as the users will now have the option to delink their bank accounts.

As very few people have access to accounts having overdraft facilities, the facility to link Rupay Credit Cards with UPI will now allow more and more people to pay later by availing the free credit period available to users of the credit cards.

So, apart from making the UPI transactions safer, the RBI move will also help increase the reach and utility of both credit cards and UPI.

However, it is not clear how the credit card issuers will cover their cost of capital as no Merchant Discount Rate (MDR) is charged to merchants for UPI payments.


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