ESAF Small Finance Bank plans to launch a UPI-based credit line in early FY28, leveraging a regulatory shift that enables small lenders to offer instant short-term digital loans, as part of its broader technological modernization.
ESAF Small Finance Bank is preparing to launch a credit line on Unified Payments Interface by the first quarter of FY28, a move that would extend short-term digital borrowing to its customers once a wider technology overhaul is complete. George Kalaparambil John, the bank’s executive director, told ETBFSI that ESAF has already engaged Euronet Worldwide for the rollout.
The planned product comes after a regulatory change that opened the door for smaller lenders to participate in UPI-linked credit. According to Business Standard, the Reserve Bank of India allowed small finance banks to offer pre-sanctioned credit lines through UPI in late 2024, with a further report in February 2025 noting that customers must give explicit consent before using the facility. The expansion was designed to broaden formal credit access, particularly for people with limited borrowing histories.
ESAF’s timetable is tied closely to its own core systems migration, which John said is expected to finish by the third quarter of FY27. The bank sees that upgrade as the technical base for the new UPI credit offering, suggesting that the payments product is being built as part of a wider modernisation rather than as a standalone launch.
The move would place ESAF among the small finance banks looking to use UPI not just for payments, but also as a channel for instant credit. In practice, that could allow eligible customers to draw on a pre-approved limit within the familiar UPI environment, subject to the bank’s underwriting and the user’s consent.
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