RBI Hikes Limit On Auto-Debits From Debit, Credit Cards Sans OTP to Rs 15,000

The Reserve Bank of India (RBI) has raised the limit for recurring transactions which can be conducted without an additional factor of authentication after an initial registration. The limit has been raised from Rs5,000 to Rs15,000, the RBI said as part of its developmental policies announced on 8 June 2022.  This would effectively reduce recurring payment pain for consumers using credit cards or debit cards for such payments.
 
"Requests have been received from stakeholders to increase the limit under the framework to facilitate payments of larger value like subscriptions, insurance premia, education fee, etc.," the RBI said. "To further augment customer convenience and leverage the benefits available under the framework, it is proposed to enhance the limit from Rs5,000 to Rs15,000 per recurring payment."
 
The framework on processing of e-mandate-based recurring payments had been introduced last year. It provides for an additional factor of authentication during registration with subsequent recurring transactions to be executed without this additional authentication up to a certain limit. The framework had led to customers complaining about difficulties in recurring payments, particularly for international transactions.
 
Till date, more than 6.25 crore mandates have been registered under this framework, including for over 3,400 international merchants, the RBI said. 
 
Bankers and merchants have welcomed the RBI announcement and said there was a requirement to raise the e-mandate limit beyond Rs5,000 because in large cities, the utility bills and things like insurance premium tend to cross that limit. The new limit of Rs15,000 will be helpful for such customers.
 
Speaking at the press conference held after the policy release, deputy governor T. Rabi Sankar said that international merchants, for whom India business is not significant, may take longer to adjust to the new rules. However, the increased limit should take care of a larger share of transactions. "The volume left out now is not significant," he said.
 

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