RBI updates auto-debit rules: Here's what changes for UPI, card payments

The Reserve Bank of India, in its ‘Digital Payments — E-mandate Framework, 2026’, announced updates to electronic auto-pay transactions via credit cards, debit cards, prepaid payment instruments (PPIs) and the Unified Payments Interface (UPI).

In a release, it noted that the changes are in “public interest” and will be effective immediately for all payment system providers and participants when it comes to the processing of recurring and domestic or cross-border transactions using cards, PPIs (i.e., wallets), and UPI.

E-mandate framework for digital payments: Key Highlights

• Recurring transactions of up to ₹15,000 can be processed without requiring additional authentication, such as an OTP.

• To validate this process, users must register for a one-time e-mandate using additional factor authentication (AFA). Once approved, subsequent recurring payments up to ₹15,000 will be processed automatically without requiring OTP each time.
• This includes recurring payments for your fixed deposits, mutual funds, SIPs, subscriptions (Netflix, Tata Sky), EMIs, bills (water, electricity, internet), insurance debits, and more.

One-time e-mandate to allow recurring debits

• After you register, customers can modify, pause or revoke recurring payment instructions at any time, with changes authenticated through AFA. For variable payments, users can set an upper limit to avoid unexpected debits beyond a defined threshold.
• The bank or payments provider should specify the validity period of the e-mandate. This information must be clearly communicated to the customer at the time of registration.

• Most payment transactions above the ₹15,000 threshold will continue to require repeated OTP authentication.
• The exceptions are recurring payments for insurance premiums, mutual fund investments, and credit card bills, which can go up to ₹1 lakh without AFA, provided they are registered under e-mandates.

Banks to provide clear alerts, no additional charges

• Banks are prohibited from imposing additional charges on customers for availing the e-mandate facility for recurring transactions.
• The RBI has also mandated that banks and payment providers send pre-debit alerts at least 24 hours before a transaction, sharing details of the amount, debit date and merchant name with the customer.
• You can use these alerts to opt out of or cancel the mandate before the payment is processed if it is a wrong transaction or fraudulent.

• It has also mandated that customers be given the option to choose or update the mode of receiving the pre-transaction alert — via email, SMS or other options.
• Notably, the exception to the pre-transaction notification requirement applies to auto-replenishment of FASTag and National Common Mobility Card (NCMC) balances.

Customers to bear no penalty for fraud

• Further, banks and payment providers are now mandated to provide post-transaction notifications and formal grievance redressal systems.
• The RBI has also extended its zero-liability policy for unauthorised electronic transactions to e-mandates. This ensures that customers are not held responsible for fraudulent debits, provided they report them in a timely manner.

RBI proposes rules for digital wallets: Latest updates

Notably, the central bank last week also proposed new rules for digital wallets and prepaid tools, including general-purpose PPI, gift PPI, transit PPI, and PPIs for non-resident Indians (NRIs), covering commonly used facilities such as mobile wallets and other prepaid tools.

Among other proposals, RBI's draft seeks to allow banks with permission to issue debit cards to issue PPIs after notifying the Department of Payment and Settlement Systems (DPSS) in Mumbai.

• For General-purpose PPI, RBI proposed that the outstanding amount in such cases should not exceed ₹2 lakh at any time. Cash loading in the general-purpose PPI may be restricted to ₹10,000 per month.
• For Gift PPI, the draft said the maximum value of such a PPI may be capped at ₹10,000; while in the case of transit PPI, it may be capped at ₹3,000, it added.

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