The requirement of AFA for card transactions/ e-mandates relaxed to Rs.5000 from Jan 1

“Enhancing Security of Card Transactions”, wherein users were provided the option of a switch on / off or set limits for various card features, including for contactless transactions at Points of Sale (PoS) terminals. RBI has relaxed the AFA (Additional Factor of Authentication) requirement for values up to Rs. 5000- per transaction with effect from January 1, 2021.

During May 2015 RBI issued direction on the requirement of AFA on the above types of transactions and relaxed the requirement for values up to Rs.2000/-per transaction. Subsequently, it was clarified that transactions beyond this limit can be processed in contactless mode, but with AFA. Further, from October 1, 2020 users have enabled setting card features according to their need and comfort.

Similarly, the AFA requirement for e-mandates/standing instructions on cards and prepayment instruments (PPIs) for recurring transactions limit was fixed to value up to Rs.2000- vide RBI notification dated August 21, 2019.  These instructions were later extended to Unified Payments Interface (UPI) as well.

It was announced in the Statement on Developmental and Regulatory Policies dated December 4, 2020 that the aforesaid transaction limit will be increased to Rs.5000-

The regulator has further instructed that the processing of recurring transactions (domestic or cross-border) using cards / PPIs / UPI under arrangements/practices not compliant with the aforesaid instructions shall not be continued beyond March 31, 2021.