RBI Makes Changes to E-Mandate Guidelines for Transactions above ₹15,000

There have been certain modifications in the guidelines issued by RBI on the payments being done through the digital medium on a repetitive basis as per the instructions issued on April 22.

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As per the revised guidelines by RBI, the transactions that involve the payment of amounts below ₹15,000 are no longer required to go through any further authentication process. Transactions that involve payments exceeding ₹15,000 need another mode of authentication before making the debit.

Threshold And Exceptions

The ₹15,000 limit is a key feature of the revised framework. However, the central bank has provided specific exemptions for select categories. Payments such as insurance premiums, mutual fund subscriptions, and credit card bill payments between ₹15,000 and ₹1 lakh may be processed without OTP, subject to conditions laid down by the regulator.

The new structure will hold true for a range of payment systems, from UPI auto-payment facilities to debit/credit card payments and even prepaid payments instruments.

Mandatory Alerts for the Customer

In an effort to give more power to customers, the RBI has issued a mandate that all banks and payment systems issue pre-debit alerts for transactions at least 24 hours prior to completion. This alert should be in detail, containing merchant names, the transaction amount, and the date when the transaction amount will be debited.

Users will have the ability to cancel or reverse this process before their amount gets debited from their accounts. Post-debit alerts are also mandated by the RBI, making sure that every transaction gets followed up with an alert.

No Charges And Liability Protection

The RBI has clarified that no charges can be levied on customers for setting up or using e-mandates. It does not matter whether it is the banks, credit cards networks, or the payment platforms.

The central bank has further expanded its previous guidelines on limiting consumer responsibility for unauthorized electronic payments into one regarding recurring payments. With this, consumers will be protected from fraud due to automatic debits if reported within the allowed period.

For card users, existing mandates can be linked to reissued cards to ensure continuity of recurring payments without disruption.

Implementation Across Ecosystem

The banks and payment aggregators were required to comply with the newly introduced regulations, including ensuring that merchants comply with the newly laid out guidelines. 

These guidelines seek to provide guidance on small-value recurring payments and also ensure adequate safeguards for high-value payments. With the inclusion of the ₹15,000 limit, mandatory notifications, and zero fees, the new guideline provides a structured method for processing auto-debit transactions.