RBI eases auto-debit rules: No OTP needed for payments up to Rs 15,000
PTC Web Desk: The Reserve Bank of India (RBI) has relaxed rules for recurring payments. Now, auto-debit transactions of up to Rs 15,000 can go through without requiring an OTP every time.
Once you approve an automatic payment for the first time, future payments within Rs 15,000 can be deducted without fresh authentication each month. This applies to common expenses like subscriptions, SIP instalments, maintenance charges, broadband bills and other utilities. Earlier, many payments failed if users missed the OTP. This change is expected to reduce such issues.
Recurring payments often fail for simple reasons; OTP delays, poor network or users missing the message while travelling or asleep.
Such failures can lead to interrupted subscriptions, Missed SIP dates, delayed insurance payments and credit card penalties. The new rule aims to reduce these problems and make payments smoother.
Users will still have full control. The first time you set up auto-pay, you must approve it using OTP or another authentication method. Only after this approval will future payments be processed automatically within the allowed limit.
The RBI has also set a higher limit of Rs 1 lakh for certain categories, including insurance premiums, mutual fund investments and credit card bill payments. This will help users who make large recurring payments avoid repeated authentication issues.
Even though OTP may not be required every time, users will still receive alerts. Banks must send a pre-debit notification with details like amount, merchant name, and payment date. A confirmation message will also be sent after the payment is completed.
With auto-pay becoming easier, it is a good idea to review all active mandates linked to your bank account, card, or UPI apps. Many people unknowingly pay for unused subscriptions, duplicate services or old memberships.
The RBI's move is aimed at making genuine recurring payments hassle-free while keeping safeguards in place. For users, it means fewer failed transactions, fewer OTP issues, and less stress in managing monthly payments.
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