What changed
The per-transaction limit for processing e-mandates without additional factor of authentication (AFA) for recurring transactions has been raised from ₹15,000 to ₹1,00,000. This applies specifically to three categories: mutual fund subscriptions, insurance premium payments, and credit card bill payments.
What it means for you
Banks and payment system operators can now process higher-value recurring transactions for these categories without requiring AFA for each subsequent transaction, reducing friction for customers. This change is expected to boost digital recurring payments in these segments, but lenders must ensure compliance with existing conditions from the June 2022 circular.
What you must do
- Update system limits for e-mandate processing to allow up to ₹1,00,000 per transaction for the specified categories.
- Review and ensure all conditions from circular CO.DPSS.POLC.No.S-518/02.14.003/2022-23 are still being met.
- Communicate the revised limit to relevant operational teams and customer-facing staff.
- Monitor transaction patterns to detect any potential misuse or fraud under the higher limit.
Who it affects
Scheduled Commercial Banks, Regional Rural Banks, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Payments Banks, Small Finance Banks, Local Area Banks, Non-bank Prepaid Payment Instrument issuers, Authorised Card Payment Networks, National Payments Corporation of India
Does this new limit apply to all recurring transactions?
No, it applies only to e-mandates for mutual fund subscriptions, insurance premium payments, and credit card bill payments. Other categories remain at the earlier limit of ₹15,000.
When does this circular take effect?
The circular is effective immediately from December 12, 2023, the date of issuance.
Do we still need to follow conditions from the June 2022 circular?
Yes, the conditions listed in the earlier circular (CO.DPSS.POLC.No.S-518/02.14.003/2022-23) continue to apply for processing these e-mandates.