No More OTP Hurdles: RBI Raises Auto-Debit Limit to ₹15,000 for Bills, SIPs and Insurance
The Reserve Bank of India (RBI) has overhauled the E-mandate Framework for 2026, raising the OTP-free limit for recurring payments to ₹15,000. While utility bills and EMIs enjoy this friction-free cap, the RBI has carved out an enhanced ₹1 lakh limit for critical financial commitments like insurance premiums and mutual fund SIPs, ensuring essential policies never lapse.
- Republic Business
- 2 min read
Millions of Indian consumers can now breathe a sigh of relief as the Reserve Bank of India (RBI) officially streamlined the digital payment ecosystem. Effective immediately, the central bank has revised its e-mandate framework, significantly increasing the thresholds for automatic deductions to ensure that missed OTPs no longer lead to lapsed insurance or interrupted streaming services.
What Changes for You?
Under the Digital Payments – E-mandate Framework, 2026, the RBI has raised the limit for recurring transactions that do not require Additional Factor Authentication (AFA)—commonly known as an OTP—to ₹15,000 per transaction.
- OTT & Utilities: Monthly bills for Netflix, broadband, and electricity under ₹15,000 will now process automatically once the initial mandate is set.
- SIPs & Small EMIs: Systematic Investment Plans and loan repayments within this bracket will no longer fail due to network delays in receiving SMS codes.
₹1 Lakh Limit for Critical Payments
In a major win for long-term savers, the RBI has carved out a special "Enhanced Limit" for essential financial services. Payments for insurance premiums, mutual fund subscriptions, and credit card bills can now be processed without an OTP for amounts up to ₹1,00,000.
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"The intent is to facilitate companies and individuals with genuine hedging and investment needs," noted a senior treasury official. This move effectively prevents policy lapses for high-value insurance customers who previously struggled with the lower authentication caps.
Control Remains with the User
While the process is becoming more automated, the RBI has tightened security to prevent "surprise" deductions.
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- Mandatory Pre-Alerts: Banks must send a notification (SMS or Email) at least 24 hours before any money is debited.
- Opt-Out Facility: The pre-debit alert must include a direct link or option for the user to cancel that specific transaction or the entire mandate.
- Zero Charges: The RBI has strictly prohibited banks and payment providers from levying any charges for setting up or using the e-mandate facility.
It is important to note that the "OTP-free" convenience only applies to subsequent payments. The very first transaction of any new mandate, as well as any modification to an existing one, still requires full Two-Factor Authentication (2FA). Additionally, any transaction exceeding the ₹15,000 (or ₹1 lakh for specific categories) limit will continue to trigger a mandatory OTP requirement for every cycle.