NEW DELHI: The Reserve Bank of India (RBI) on Wednesday raised the limit for auto-debit mandates on recurring payments done through cards and UPI (Unified Payment Interface) to ₹15,000 from ₹5,000.
The central bank’s guidelines, which kicked in on 1 October last year, mandated customers to carry additional factor authentication (AFA) on all recurring payments done through credit cards, debit cards and UPI. As per the guidelines, AFA was to be done as a one-time setup for payments below ₹5,000, whereas all transactions above this limit had to be approved by a one-time password (OTP) by the user.
Now, customers will have to approve recurring transactions with an OTP sent from the bank only for payments above ₹15,000.
This step will augment customer convenience, said RBI governor Shaktikanta Das. “The framework for processing of e-mandate based recurring payments was introduced by the Reserve Bank keeping in mind the benefits of convenience, safety and security to the users…To further facilitate recurring payments like subscriptions, insurance premiums, education fees of larger value under the framework, the limit is being enhanced from ₹5,000 to ₹15,000,” he said.
Over 6.25 crore mandates have been registered in favour of a large number of domestic and over 3,400 international merchants under this framework, governor Das said.
“This will further leverage the benefits available under the framework and augment customer convenience,” he said.
The RBI on Wednesday raised key interest rate, the second hike in as many months, by 50 basis points, as was widely expected, to rein in persistently high inflation in Asia’s third-largest economy.
The central bank also dropped the long-standing phrase that future policy would remain ‘accommodative’, reinforcing expectations of further rate hikes and other forms of tightening in coming months as fighting inflation becomes its main focus.
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