RBI Eases High-Value Recurring Payments, Boosting Digital Transactions

The Reserve Bank of India (RBI) has implemented new e-mandate rules, significantly increasing the transaction limit for recurring payments that do not require an Additional Factor of Authentication (AFA), such as an One-Time Password (OTP). Previously, payments exceeding ₹15,000 required an OTP for authentication. This threshold has now been raised to ₹1 lakh (₹100,000) for specific categories of high-value transactions. This policy adjustment primarily targets payments for mutual fund subscriptions, insurance premiums, and credit card bill payments. For these services, transactions up to ₹1 lakh can now be processed seamlessly without an OTP, streamlining the digital payment experience for consumers. The existing ₹15,000 limit remains in place for standard everyday subscriptions, including streaming services, utility bills, and gym memberships, which continue to be processed without an AFA. The RBI's move is poised to enhance the efficiency and convenience of digital transactions within India's financial ecosystem. By reducing friction in high-value recurring payments, the central bank aims to encourage broader adoption of digital payment methods, particularly for critical financial commitments. This initiative builds on the existing framework for e-mandates, which has facilitated automatic recurring deductions for various services, improving convenience and reducing missed payments for consumers and service providers alike. The expansion of this facility to higher value transactions is expected to further integrate digital payments into core financial planning and management.