RBI Proposes Significant Hike in UPI Auto Payment Limits for Certain Transactions

In a move aimed at promoting ease of transactions, the Reserve Bank of India (RBI) has proposed a substantial increase in the limits for UPI auto payments without the need for additional verification. The new proposal means users won’t have to enter a one-time password (OTP) for auto payments up to Rs 1 lakh for specific transactions, including mutual fund subscriptions, insurance premiums, and credit card repayments.

Previously, OTP-based authentication was mandatory for auto payments exceeding Rs 15,000. The proposed limit of Rs 1 lakh will now apply to e-mandates for three key payment categories: mutual fund subscriptions, insurance premium subscriptions, and credit card repayments.

RBI stated, “The framework for processing e-mandates for recurring transactions, introduced in August 2019, aimed to balance safety with customer convenience. With over 8.5 crore e-mandates registered, processing nearly Rs 2800 crores per month, the system has stabilized. However, adoption in categories with transaction sizes exceeding Rs 15,000, such as mutual funds, insurance premiums, and credit card payments, has been slow.”

The proposed change seeks to exempt the Additional Factor of Authentication (AFA) requirement for transactions up to Rs 1 lakh in the specified categories while existing requirements like pre- and post-transaction notifications and opt-out facilities will remain. The revised circular detailing these changes is expected to be issued shortly.

RBI highlighted, “e-Mandates for recurring payments have gained popularity, and it is now proposed to raise the AFA limit to Rs 1 lakh per transaction for mutual fund subscriptions, insurance premium payments, and credit card repayments. This measure aims to further boost the usage of e-mandates.