RBI Governor Shaktikanta Das said that during this period, other existing requirements, such as pre- and post-transaction information, facility for users to exit the transaction, etc. will be applicable.
The Reserve Bank of India (RBI) has changed the method of transactions. RBI has allowed merchants to automatically deduct money from customers’ accounts for a fixed period of time (recurring payments) with their permission in lieu of goods and services, increasing the limit from the existing Rs 15,000 to Rs 1 lakh in some cases. This limit has been increased for some categories like mutual funds, insurance premium.
The limit for withdrawing money directly from the customer’s account without any additional verification mechanism (AFA) is currently Rs 15,000. Payments above this amount require additional verification. RBI has taken this decision in view of the increasing number of such transactions and the smooth functioning of the system.
Such automatic permission currently stands at Rs 8.5 crore. Under this, transactions worth Rs 2,800 crore are taking place every month. Various sections have expressed the need to increase the limits in categories like mutual funds, payment of insurance premiums and credit card bill payments. In view of this, the Central Bank has taken this step.
What Shaktikanta Das said: Reserve Bank Governor Shaktikanta Das said, “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.” Other existing requirements, such as pre- and post-transaction information, facility for users to opt out of transactions, etc. will remain in place during this period.
RBI also announced the setting up of a ‘Fintech Repository’ to better understand developments in the fintech ecosystem and support the sector. Shaktikanta Das said, “Reserve Bank Innovation Hub will start it on or before April 2024.” Fintechs will be encouraged to voluntarily provide relevant information through this ‘repository’.
