The RBI has proposed withdrawal of AFA for e-mandates of recurring transactions of up to INR 1 Lakh for segments such as subscription to mutual funds and payment of insurance premium
The central bank also said that it will establish a cloud facility for the financial sector in India to enhance the security, integrity, and privacy of data
RBI Governor Shaktikanta Das announced that a repository for the fintech companies will be set up before the commencement of the next financial year
The Reserve Bank of India (RBI) has proposed increasing the limit for UPI payments to hospitals and educational institutions to INR 5 Lakh per transaction from INR 1 Lakh.
Currently, UPI payments are capped at INR 1 Lakh, except for a few categories like capital markets, collections, and insurance, for which the limit is INR 2 Lakh.
The central bank said it would issue separate instructions on the issue shortly. The announcement came after the Monetary Policy Committee (MPC) meeting.
Besides, the RBI has proposed withdrawal of additional factor of authentication (AFA) for e-mandates of recurring transactions of up to INR 1 Lakh in segments such as subscription to mutual funds, payment of insurance premium and payments of credit card bills to make auto-payments easier and convenient for recurring transactions.
Currently, the limits for transacting without AFA stands at INR 15,000.
“The number of e-mandates registered currently stands at 8.5 Cr, processing nearly INR 2,800 Cr of transactions per month. The system has stabilised, but in categories such as subscription to mutual funds, payment of insurance premium and credit card bill payments, where the transaction sizes are more than INR 15,000, a need to enhance the limit has been expressed as adoption has been lagging,” the RBI said.
Citing the importance of securing the financial sector, the RBI said it will establish a cloud facility for the financial sector in India to enhance the security, integrity, and privacy of data. The cloud facility will be set up and initially operated by Indian Financial Technology & Allied Services (IFTAS), a wholly-owned subsidiary of the RBI, and eventually be transferred to a separate entity owned by the financial sector participants.
RBI Governor Shaktikanta Das also announced that a repository for the fintech companies will be set up before the commencement of the next financial year.
“Financial entities like banks and NBFCs (non-banking financial companies) in India are increasingly partnering with fintechs. For a better understanding of developments in the fintech ecosystem and to support this sector, it is proposed to set up a fintech repository,” Das said.
The development comes at a time when the UPI transactions have been reaching new peaks almost every month. At INR 1,124 Cr, UPI transactions crossed the 1,100 Cr mark for the second consecutive month in November.
The NPCI has set its sights on achieving 100 Bn monthly transactions. As part of this, it unveiled multiple UPI innovations at the Global Fintech Fest 2023, including credit line access, NFC-based offline payment options UPI LITE X and Tap & Pay, and conversational payment solutions Hello! UPI and BillPay Connect.
