Auto debit limit without OTP for credit, debit cards hiked by RBI

New Delhi, Jun 08: The Reserve Bank of India (RBI) has hiked the limit on the amount of recurring transactions that can be made without an additional factor authentication (OTP) via e-mandagtes to Rs 15,000 from the current Rs 5,000.

This feature would help customers make high value transactions such as paying insurance premium, education fees etc. This means that they can use their debit or credit card without an additional factor of authentication like OTP.

The e-mandate for recurring transactions was already in effect from October 1 2021. Banks and other financial institutions are required to ask their customers to provide additional factor authentication for the payment which is above Rs 5,000. Now this additional authentication will be needed if the e-mandate is for recurring payments exceeding Rs 15,000.

The framework on processing of e-mandate based recurring payments, inter-alia, provides for an Additional Factor of Authentication (AFA) during registration, sending a pre-debit notification, subsequent recurring transactions to be executed without AFA, and an easier avenue to withdraw such mandates. Benefits of convenience, safety and security are available to the users. The system also benefits from users' confidence. Major banks are providing the facility and the transaction volumes are seeing good traction. Till date, over 6.25 crore mandates have been registered under this framework, including for over 3,400 international merchants. 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. To further augment customer convenience and leverage the benefits available under the framework, it is proposed to enhance the limit from Rs 5,000 to Rs 15,000 per recurring payment. Necessary instructions will be issued shortly, the RBI said.

From October 1 2021 the RBI had said that a bank is required to send a notification to the customer at least 24 hours before the auto debit payment is to be deducted and allow the debit only confirmation by the customer.