RBI Modified Transaction Rule: Up to Rs. 1 lakh in UPI payments, no OTP is required. Learn more

 RBI Modified Transaction Rule: Up to Rs. 1 lakh in UPI payments, no OTP is required. Learn more

RBI Modified Transaction Rule: Up to Rs. 1 lakh in UPI payments, no OTP is required. Learn more

According to RBI Governor Shaktikanta Das, other current requirements—like the ability for consumers to terminate transactions and get pre- and post-transaction information—will remain in effect throughout this time.

The mode of transactions has been modified by the Reserve Bank of India (RBI). In lieu of products and services, RBI has permitted merchants to routinely take money from customers' accounts for a certain amount of time (recurring payments) with their consent. In some situations, this ceiling has been increased from the current Rs 15,000 to Rs 1 lakh. For other categories—like mutual funds and insurance premiums—this cap has been raised.

Currently, there is a Rs 15,000 restriction on direct money withdrawals from a customer's account without the use of an extra verification method (AFA). Any payment beyond this amount has to be verified further. The RBI made its judgment in light of the rising volume of these transactions and the system's seamless operation.

At now, the amount of automatic authorization is Rs 8.5 crore. Monthly transactions on this account for a total of Rs 2,800 crore. The necessity to raise the restrictions in areas such as mutual funds, insurance premium payments, and credit card bill payments has been acknowledged by a number of sections. The Central Bank has made this move in light of this.

"Exemption from the requirement of Additional Arrangement of Verification (AFA) for transactions up to Rs 1 lakh for payment of mutual funds, insurance premiums, and credit card bills," said Reserve Bank Governor Shaktikanta Das. During this time, other current requirements—like pre- and post-transaction information and the ability for consumers to opt out of transactions—will still be in effect.

In order to better understand and assist the fintech industry, the RBI also announced the creation of a "Fintech Repository." "Reserve Bank Innovation Hub will start it on or before April 2024," said Shaktikanta Das. Through this "repository," fintechs will be encouraged to freely provide pertinent data.