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Enhanced E-Mandate Limits: Facilitating Convenient and Secure Transactions for Mutual Fund Investors
RBI Increases E-Mandate Limit for Mutual Fund Investors to Rs 1 Lakh
RBI Increases E-Mandate Limit for Mutual Fund Investors to Rs 1 Lakh
The RBI, under the leadership of Governor Shaktikanta Das, has announced an increase in the e-mandate limit for mutual fund investors to Rs 1 lakh, exempting the need for Additional Factor of Authentication (AFA). This decision aims to facilitate more convenient and secure transactions for mutual fund investors, as well as for categories such as payment of insurance premiums and credit card bill payments. The revised circular will be issued shortly, and the existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc., will continue to apply to these transactions.
Key Takeaways:
1. Increase in e-mandate limit for mutual fund investors to Rs 1 lakh without the need for Additional Factor of Authentication (AFA).
2. Exemption from AFA requirement applies to categories such as subscription to mutual funds, payment of insurance premiums, and credit card bill payments.
3. The number of e-mandates registered currently stands at 8.5 crore, processing nearly Rs 2,800 crores of transactions per month.
4. The decision aims to balance the safety and security of digital transactions with customer convenience.
5. The existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc., will continue to apply to these transactions.
The Reserve Bank of India (RBI) has announced a decision to increase the limit for e-mandates for mutual fund investors without the need for Additional Factor of Authentication (AFA) to Rs 1 lakh. This decision was announced by RBI Governor Shaktikanta Das during the Monetary Policy Committee (MPC) meeting.
Here’s a breakdown of the key points from the provided information:
RBI’s Decision
The RBI has decided to increase the limit for e-mandates for mutual fund investors without the need for Additional Factor of Authentication (AFA) to Rs 1 lakh.
This exemption from the requirement of AFA applies to various categories, including subscription to mutual funds, payment of insurance premiums, and payments of credit card bills.
Background
The framework for processing e-mandates for recurring transactions was introduced in August 2019 to balance the safety and security of digital transactions with customer convenience.
The current limit for execution of e-mandates without Additional Factor of Authentication (AFA) stands at Rs 15,000, as of the last update in June 2022.
Impact and Adoption
The number of e-mandates registered currently stands at 8.5 crore, processing nearly Rs 2,800 crores of transactions per month.
The RBI has expressed the need to enhance the limit for categories such as subscription to mutual funds, payment of insurance premiums, and credit card bill payments, where the transaction sizes are more than Rs 15,000, as adoption has been lagging.
Other Requirements
The existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc., will continue to apply to these transactions.
The revised circular regarding the increased limit for e-mandates without AFA will be issued shortly by the RBI.
This decision is aimed at facilitating easier and more convenient transactions for mutual fund investors and other categories mentioned, while maintaining the necessary security measures.
FAQ
Q1: What is the new e-mandate limit for mutual fund investors without the need for Additional Factor of Authentication (AFA)?
A1: The new limit is Rs 1 lakh, as announced by the RBI.
Q2: Which categories are exempted from the requirement of AFA for transactions up to Rs 1 lakh? A2: Categories such as subscription to mutual funds, payment of insurance premiums, and payments of credit card bills are exempted from the AFA requirement.
Q3: Will the existing requirements such as pre- and post-transaction notifications continue to apply to these transactions?
A3: Yes, the existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc., will continue to apply to these transactions.
