Skip to main content

Guidelines on processing of e-mandates for recurring transactions

Reserve Bank of India (RBI) has enhanced the Additional Factor of Authentication (AFA) limit for e-mandates of recurring transactions.

What is an e-Mandate? 

A mandate is a standard instruction that a customer provides to his / her issuing bank and other institutions allowing them to automatically debit the mentioned amount from his / her bank account. e-Mandate is the electronic version of it.

What are the Guidelines on processing of e-mandates for recurring transactions?

The e-mandate framework prescribes an Additional Factor of Authentication (AFA), inter alia, while processing the first transaction in case of e-mandates / standing instructions on cards, prepaid payment instruments and Unified Payments Interface (UPI).

(Updated on January 06, 2024)

For subsequent transactions executing the e-mandates, the prescription of AFA is waived for transactions with values up to ₹15,000/- per transaction. However, the limit is up to ₹1,00,000/- (increased from ₹15,000/-) per transaction for the following categories –

  • Subscription to mutual funds
  • Payment of insurance premiums
  • Credit card bill payments

(Updated on August 31, 2024)

The e-mandate framework, currently enables recurring payments with fixed periodicity such as daily, weekly, monthly, etc. Now, the payments towards replenishment of balances in FASTag and National Common Mobility Card (NCMC), which are recurring in nature but without any fixed periodicity, have been brought under the e-mandate framework and an auto-replenishment facility has been introduced for such payments. The auto-replenishment will be triggered when the balance in FASTag or NCMC falls below a threshold amount set by the customer.

The e-mandate framework requires the issuer to send a pre-debit notification to the customer at least 24 hours prior to the actual charge / debit to the account. This requirement is exempt for payments made from customer’s account for auto-replenishment of balances in FASTag and NCMC under the e-mandate framework.

Proposed change in e-mandate framework

UPI Lite facility allows a customer to load his UPI Lite wallet up to ₹2000/- and make payments up to ₹500/- from the wallet. 

It is proposed to bring UPI Lite within the ambit of the e-mandate framework by introducing an auto-replenishment facility for loading the UPI Lite wallet, if the balance goes below a threshold amount set by the customer. Further, the requirement of additional authentication or pre-debit notification is proposed to be dispensed with. 


References

Reserve Bank of India. (2019, August 21). 'Processing of e-mandate on cards for recurring transactions'. Retrieved from https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11668&fn=9&Mode=0

Reserve Bank of India. (2020, January 10). 'Processing of e-mandate in Unified Payments Interface (UPI) for recurring transactions'. Retrieved from https://rbi.org.in/scripts/FS_Notification.aspx?Id=11784&fn=9&Mode=0

Reserve Bank of India. (2020, December 04). 'Processing of e-mandates for recurring transactions'. Retrieved from https://rbi.org.in/scripts/FS_Notification.aspx?Id=12002&fn=9&Mode=0

Reserve Bank of India. (2021, March 31). 'Framework for processing of e-mandates for recurring online transactions'. Retrieved from https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=12051&fn=9&Mode=0

Reserve Bank of India. (2022, June 16). 'Processing of e-mandates for recurring transactions'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12341&Mode=0

Reserve Bank of India. (2023, December 12). 'Processing of e-mandates for recurring transactions'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12570&Mode=0

Reserve Bank of India. (2024, August 22). 'Processing of e-mandates for recurring transactions'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12722&Mode=0

Reserve Bank of India. (2024, June 07). 'Statement on Developmental and Regulatory Policies'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58051


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

FX Global Code

Reserve Bank of India (RBI) has signed its renewed Statement of Commitment (SoC) to the FX Global Code.  What is FX Global Code? FX Global Code is a set of global principles of good practice in the foreign exchange market. The Code contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The establishment of the Code was facilitated by the Foreign Exchange Working Group (FXWG), which operated under the auspices of the BIS Markets Committee.  The Code was developed by a partnership between central banks and market participants from around the globe and was first published in 2017. The Code promotes a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of market participants, supported by resilient infras...
Post a Comment
Read more

Amendments in / additions to forex guidelines

Reserve Bank of India (RBI) has amended various forex guidelines. This article lists out some of the such recent amendments. What are the updates in the existing guidelines? Previous guidelines Revised guidelines Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills and non-convertible debentures / bonds and commercial papers issued by an Indian company. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. The balance...
Post a Comment
Read more

Investments in Non-SLR instruments by State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs)

Reserve Bank of India (RBI) has issued directions on investments in non-SLR instruments by State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs). What is the prudential limit for non-SLR investment by StCBs and CCBs? Total Non-SLR investments shall not exceed 10% of the total deposits of a bank as on March 31 of the preceding financial year. Which instruments are permitted for non-SLR investments by StCBs and CCBs? StCBs / CCBs may invest in the following instruments – "A" or equivalent and higher rated Commercial Papers (CPs), debentures and bonds. Units of Debt Mutual Funds and Money Market Mutual Funds. Shares of Market Infrastructure Companies (MICs), e.g. Clearing Corporation of India Ltd. (CCIL), National Payments Corporation of India (NPCI), Society for World-wide Inter-bank Financial Telecommunication (SWIFT). Share capital of Shared Service Entity (SSE) set up by National Bank for Agriculture and Rural Development (NABARD) for StCBs and CCBs. Which a...
Post a Comment
Read more

Directions on Regulation of Payment Aggregators (PAs)

Reserve Bank of India (RBI) has issued directions on regulation of Payment Aggregators (PAs). Who is Payment Aggregator (PA)? Payment Aggregator (PA) is an entity that facilitates aggregation of payments made by customers to the merchants through one or more payment channels through the merchant’s interface (physical / virtual) for purchase of goods, services or investment products, and subsequently settles the collected funds to such merchants.  What are the categories of PA? PA – Physical (PA-P) – PA that facilitates transactions where both the acceptance device and payment instrument are physically present in close proximity while making the transaction. PA – Cross Border (PA-CB) – PA that facilitates aggregation of cross-border payments for current account transactions, that are not prohibited under Foreign Exchange Management Act, 1999 (FEMA), for its onboarded merchants through e-commerce mode. The 2 sub-categories of PA-CB are – PA-CB facilitating inward transaction (i.e. tr...
Post a Comment
Read more

Nomination for demat accounts and mutual fund folios

Securities and Exchange Board of India (SEBI) had revised the guidelines on nomination for demat accounts and mutual fund folios.   Which entities are covered by the guidelines? The following regulated entities (REs) are covered by the guidelines – Asset Management Companies (AMCs) of Mutual Funds (MFs) and their Registrars to an issue and share Transfer Agents (RTAs)  Association of Mutual Funds in India (AMFI)  Recognized Depositories  Registered Depository Participants (DPs) What are the guidelines on nomination facility? Nomination shall be mandatory for single holding and optional for jointly held accounts / folios. However, an investor having single holding / account / folio can opt-out of nomination, either online or through physical / offline mode. In case a joint account / folio becomes single holding, post the demise of holders, either nomination or ‘opt-out’, is mandatory. Investors shall have the option to specify guardians when nominees are minors....
Post a Comment
Read more