Reserve Bank of India has announced that the e-mandate for recurring payments has been increased from Rs.5,000 to Rs.15,000. The new increased limit has already come into force. It comes days after the move reserve Bank of India The result was announced at its Monetary Policy Committee meeting. Debit Card and Credit Card Exchange. The decision to increase the limit has come into force a day before.
RBI said in a statement on Thursday, June 16, that the increased e-mandate limit will come into force with immediate effect. “The e-mandate framework has prescribed an Additional Factor of Authentication (AFA), inter alia, while processing the first transaction in case of e-mandate/standing instructions on cards, prepaid payment instruments and Unified Payments Interface. 5,000 For post-transaction transactions up to Rs./- (AFA limit), the AFA prescription was waived off,” it said.
“On a review of the implementation of the e-mandate framework and the security available to customers, it has been decided to increase the above AFA limit from Rs 5,000/- to Rs 15,000/-,” RBI said in its statement. “This circular has been issued under section 10(2) read with section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into force with immediate effect,” the central bank said.
In its bi-monthly MPC meeting on June 8, RBI Governor Shaktikanta Das had notified RBI’s plans to implement the move.
“To further facilitate recurring payments such as subscription, insurance premium, large value education fee under the framework, the limit is being increased from Rs 5,000 to Rs 15,000,” the RBI governor said during his speech earlier in the day. “This will further leverage the benefits available under the framework and enhance customer convenience,” Das said. RBI has said that safety, security and convenience is provided to users through e-mandate for recurring payments.
“The (e-mandate) limit has now been increased to Rs 15,000, the process of subscription payment will become more hassle free and convenient. This will allow recurring payments to become a norm for paying slightly higher ticket sizes like rent, maintenance, insurance premiums, annual subscriptions, etc. Furthermore, it will encourage more players to adopt the membership framework, making the payments ecosystem more automated. A very encouraging move from the central bank, expected to take digital payments a step further,” said Pranjal Kamra- CEO, Finology Ventures.
RBI clarified that stakeholders had urged the central bank to increase the limit under the framework to facilitate payment of large value such as subscription, insurance premium, education fee etc.
An e-mandate refers to the act of a debit or credit cardholder giving a standing instruction to a merchant platform such as a website or mobile application to deduct a certain amount for recurring transactions. This includes subscription on OTT platform, gas bill payment, electricity bill payment etc. Through e-Mandate, the Cardholder consents to the Merchant Platform to debit his/her Credit or Debit Card for recurring payment requests that may be sent by the Merchant.
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