RBI Increases UPI Auto Payment Limit to Rs 1 Lakh for Mutual Funds, Insurance Premiums, and Credit Card Repayments

Key Takeaways:

• RBI has increased the transaction limit for UPI auto payments without OTP-based authentication to Rs 1 lakh from Rs 15,000.
• The new limit will apply to specific transactions such as mutual fund subscriptions, insurance premium payments, and credit card repayments.
• The decision is aimed at enhancing customer convenience while maintaining the safety and security of digital transactions.
• Other 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 recently announced a significant increase in the transaction limits for UPI auto payments, specifically for certain transactions that do not require additional factor authentication (AFA). The new limit for UPI auto payments without OTP-based authentication has been raised to Rs 1 lakh from the previous limit of Rs 15,000. This change will apply to specific transactions such as mutual fund subscriptions, insurance premium payments, and credit card repayments.

The RBI’s decision to raise the transaction limit for UPI auto payments without OTP authentication is aimed at enhancing customer convenience while maintaining the safety and security of digital transactions. The move is expected to accelerate the usage of e-mandates for recurring transactions, particularly for the specified categories mentioned above.

The framework for processing e-mandates for recurring transactions was introduced in August 2019 to strike a balance between the safety and security of digital transactions and customer convenience. The recent increase in the transaction limit is a response to the expressed need to enhance the limit for certain categories where transaction sizes exceed Rs 15,000.

The RBI’s announcement also includes the exemption of the requirement of AFA for transactions up to Rs 1 lakh for subscription to mutual funds, payment of insurance premiums, and credit card bill payments. It is important to note that other existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc. will continue to apply to these transactions.

Additionally, the RBI has increased the transaction limit for UPI payments to hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh per transaction. This change is part of the broader effort to facilitate digital payments and enhance customer convenience.

The decision to raise the transaction limits for UPI auto payments and UPI payments to hospitals and educational institutions is expected to have a positive impact on the adoption of digital payments in India. The move has been welcomed by industry experts and stakeholders, who view it as a step in the right direction for the convenience of consumers and the rapid adoption of digital payments in the country.

The advantages of setting up UPI auto payments include timely payments, customized payment options, the ability to modify, revoke, or pause recurring mandates, secure and convenient transactions, and a cashless way of transacting, among others.

The increase in transaction limits for UPI auto payments and UPI payments to hospitals and educational institutions, along with the advantages of UPI auto payments, are expected to contribute to the growth of digital payments and provide relief for consumers and investors in India.

FAQ

Q1: What is the new transaction limit for UPI auto payments without OTP-based authentication?

A1: The new transaction limit has been raised to Rs 1 lakh from the previous limit of Rs 15,000.

Q2: Which transactions will the new limit apply to?

A2: The new limit will apply to specific transactions such as mutual fund subscriptions, insurance premium payments, and credit card repayments.

Q3: What are the key objectives of raising the UPI auto payment limit?

A3: The decision aims to enhance customer convenience while maintaining the safety and security of digital transactions.