Bank customers can soon automate the payment of their credit card bills, insurance premiums, loan instalments and all such transactions of recurring nature up to an increased limit of Rs 10 lakh.
The National Payment Corp of India (NPCI) has enhanced the limit for giving e-mandate on debit card and net banking transactions through their National Automated Clearing House (NACH) platform to Rs 10 lakh from the current Rs 1 lakh.
Furthermore, the facility has been extended to all categories of service providers who generate periodic bills, except for prepaid recharge, NPCI said in a circular issued to member banks on Thursday.
The development comes at a time when digital payments adoption in India has seen a massive surge due to the Covid-19 pandemic.
Banks have been asked to update their systems to implement the service by the end of the month. An e-mandate allows a customer to make recurring payments by giving a one-time standing instruction to their bank.
“Now that the e-mandate process has stabilised, in line with the other payment options the scope of e-mandate is extended to all categories of billers,” NPCI said in the circular. “Current mandate limit of Rs 1 lakh is increased to Rs 10 lakh.”
“Considering the current situation and requests for more digital payment options it has been decided that the following changes will be implemented with effect from August 01, 2020,” it said.
The feature will soon allow customers to give banks the consent to automatically debit payments for monthly bills, loan, credit card, SIP payments by giving a one-time e-mandate.
However, the limit for Aadhaar-based eSign mandate will continue to be at Rs 1 lakh for now, according to the circular.
“The customers through E-Mandate can set up a standing instruction allowing the sponsor banks to pull the funds as per their instruction at an agreed frequency,” NPCI said.
The Rs 10 lakh limit on maximum transactions will be reviewed after a year, NPCI, which operates the NACH platform, further said.
A total of 125 million debit transactions worth Rs 1.14 lakh crore has been made on the NACH platform in the ongoing fiscal year, till date, as per NPCI data.
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