The central bank of the country has been providing great relief by taking UPI auto debit transaction. Reserve Bank is going to increase the limit of OTP based recurring payment. Now it has been decided to increase it from Rs 15 thousand to Rs 1 lakh. This means that OTP will not be required on payments up to Rs 1 lakh. But RBI will implement this facility only for some payments. Will not be applicable for all types of payments. The last change was seen in June 2022. Then its limit was increased from Rs 5 to Rs 15 thousand.
The Reserve Bank of India on Friday announced that it has proposed to increase the limit for UPI auto payment for specific transactions without additional factor authentication. According to the announcement, OTP will not be required for payments up to Rs 1 lakh. This new limit has been implemented only for mutual fund subscription, insurance premium subscription and credit card repayment. Currently, OTP-based AFA is applicable when auto payment through UPI exceeds Rs 15,000.
8.5 crore do e-mandate
Keeping in view the convenience of customers along with the safety and security of digital transactions, the outline for processing of e-mandate for recurring transactions was laid in August 2019. At present the number of registered e-mandates is 8.5 crore, which processes transactions worth approximately Rs 2800 crore per month. The system has become completely stable. But in categories like mutual fund subscription, insurance premium payment and credit card bill payment, where the transaction size is more than Rs 15,000, a need has been felt to increase the limit. A circular will be issued on this soon.
Why was there a need?
Presenting the bi-monthly monetary policy review, central bank Governor Shaktikanta Das said it has been proposed to exempt the AFA requirement for transactions up to Rs 1 lakh for payment of mutual funds, insurance premiums and credit card bills. He said that other existing requirements like pre- and post-transaction information, facility for users to opt out etc. will be applicable to these transactions. A revised circular in this regard will be issued soon.
Fintech repository will be established
In another decision, RBI also announced setting up of a Fintech repository to better understand the developments in the Fintech ecosystem and support the sector. Das said that the Reserve Bank Innovation Hub will be started on or before April 2024. Fintechs will be encouraged to voluntarily provide relevant information through this repository. Financial institutions like banks and NBFCs in India are increasingly partnering with fintechs. Das also said that the central bank is working towards setting up cloud facilities for the financial sector in India.
There is a constant demand for data in banks and financial institutions and it is also increasing. In view of this, many of them are using cloud facilities for this purpose. Das said that the Reserve Bank is working on setting up a cloud facility for the financial sector in India for this purpose. He said that such a facility will increase the security and privacy of data.
Source: www.tv9hindi.com”