RBI E-Mandate Framework

An e-mandate is a customer’s electronic instruction permitting recurring payments, such as subscription fees or insurance premiums. The Reserve Bank of India (RBI) framework allows subsequent payments without fresh authentication within prescribed limits, while requiring safeguards for consent, notification and cancellation.

Consent and authentication

The framework covers recurring transactions through cards, prepaid payment instruments and UPI. It combines convenient automatic payments with controls over how the original payment authority is created and used.

• Registration of an e-mandate requires Additional Factor of Authentication (AFA), and the first transaction must also undergo authentication; these steps may be combined.
• The customer specifies the mandate’s validity and whether payments are for a fixed amount or a variable amount subject to a maximum value.
• Subsequent recurring transactions can proceed without fresh AFA only within the applicable regulatory limit and the customer’s mandate; transactions exceeding the applicable exemption limit require AFA.

Advance notice and transaction control

The normal rule requires the issuer to send a pre-debit notification at least 24 hours before the recurring debit. This gives the customer an opportunity to review and stop an upcoming payment.

• The notification provides transaction information, including the merchant, amount and scheduled debit date.
• The customer must have an option to opt out of the particular transaction or withdraw the mandate before the debit.
• A post-transaction alert informs the customer that the payment has occurred.
• Specified FASTag and National Common Mobility Card auto-replenishments are exempt from the normal pre-debit notification requirement because they are triggered when balances fall below customer-set thresholds.

Modification, withdrawal and consumer choice

An e-mandate is revocable payment authority, not permanent permission to debit an account. The framework therefore requires controls throughout its life, rather than consent only at enrolment.

• Modification and withdrawal of a mandate require AFA, helping prevent unauthorised changes.
• The issuer must provide an online withdrawal facility; after withdrawal, further recurring transactions under that mandate must not be permitted.
• Stopping one scheduled debit is different from withdrawing the mandate: the former blocks that payment, while the latter ends the recurring payment authority.
• Withdrawal of payment authority does not itself terminate the underlying service contract or extinguish an amount legitimately owed.