RBI Eases Recurring Payment Pain For Consumers

The Reserve Bank of India has raised the limit for recurring transactions which can be conducted without an additional factor of authentication after an initial registration.

The limit has been raised from Rs 5,000 to Rs 15,000, the RBI said as part of its developmental policies announced on Wednesday.

"Requests have been received from stakeholders to increase the limit under the framework to facilitate payments of larger value like subscriptions, insurance premia, education fee, etc.," the RBI said. "To further augment customer convenience and leverage the benefits available under the framework, it is proposed to enhance the limit from Rs 5,000 to Rs 15,000 per recurring payment."

The framework on processing of e-mandate-based recurring payments had been introduced last year. It provides for an additional factor of authentication during registration with subsequent recurring transactions to be executed without this additional authentication up to a certain limit.

The framework had led to customers complaining about difficulties in recurring payments, particularly for international transactions.

Till date, more than 6.25 crore mandates have been registered under this framework, including for over 3,400 international merchants, the RBI said.

"There was a requirement to raise the e-mandate limit beyond Rs 5,000 because in large cities, the utility bills and things like insurance premium tend to cross that limit. The new limit of Rs 15,000 will be helpful for such customers," said Anand Kumar Bajaj, managing director and chief executive officer of fintech firm Paynearby. "This is a trial and error phase right now. We eventually see this limit being raised to Rs 50,000."

Speaking at the press conference held after the policy release, deputy T. Rabi Sankar said that international merchants, for whom India business is not significant, may take longer to adjust to the new rules. However, the increased limit should take care of a larger share of transactions. "The volume left out now is not significant," he said.