The Reserve Bank of India’s recent increase in transaction limits for e-mandates signals a pivotal shift in digital insurance renewals, encouraging higher-value recurring payments amid ongoing industry adaptation and operational trade-offs.
India’s push to digitise insurance renewals now rests on a regulatory shift that lets recurring premium debits move well beyond the old small-ticket ceiling. In a circular issued on 12 December 2023, the Reserve Bank of India raised the limit for e-mandates processed without an additional authentication step from ₹15,000 to ₹1 lakh per transaction for insurance premiums, mutual fund subscriptions and credit card bills. The change matters because many policies, especially protection and health products sold in instalments, no longer fit neatly into a one-off online checkout.
The move was flagged days earlier in the central bank’s December 2023 monetary policy package, which also proposed higher UPI ceilings for payments to hospitals and educational institutions. Business Standard reported that the e-mandate framework, introduced in August 2019, had grown to 8.5 crore registered mandates handling nearly Rs 2,800 crore of transactions a month by the time the limit was raised. But the RBI said adoption had been weaker in categories such as insurance premiums, where bill sizes often ran above the previous cap. Governor Shaktikanta Das said the higher threshold would “further accelerate the usage of e-mandates”.
For customers, the immediate effect is fairly simple: recurring debits within the specified insurance category do not need an OTP-style confirmation unless the amount is above ₹1 lakh. Moneycontrol reported that the higher ceiling applies to e-mandates routed through cards, UPI and prepaid payment instruments, while traditional standing instructions on bank accounts were already automatic and therefore do not change. The RBI also kept user safeguards in place. As Das put it, “The other existing requirements such as pre- and post-transaction notifications, opt-out facility for users, etc., shall continue to apply to these transactions.”
That still leaves insurers with an important choice over which rail to use. Mint’s comparison of UPI AutoPay and eNACH, written about SIPs but relevant to any recurring-collection set-up, said a UPI AutoPay mandate is usually approved inside a UPI app with a PIN, while an eNACH mandate is authenticated through net banking or a debit card. The limits diverge too. Mint said banks allow UPI AutoPay mandates of up to ₹1 lakh per transaction, while eNACH can stretch far higher, even to ₹1 crore depending on the platform, though some operators impose lower caps. It also reported that not all banks had yet implemented the higher UPI AutoPay limit.
Insurer payment pages show how untidy the real-world journey can be. HDFC Life’s current premium-payment page offers renewal collections through net banking across more than 75 banks, credit cards, debit cards, EMI, wallets, UPI QR, UPI and bank transfer. It says UPI can be used for renewal premiums of up to ₹2 lakh, subject to bank or service-provider limits, after which other eligible payment methods must take over. The same page says some customers can register auto-debit on bank accounts or cards at the point of payment, underlining that insurers are stitching together several systems rather than relying on a single gateway button.
The commercial terms can be just as important as the technology. HDFC Life says renewal payments made by credit card attract a convenience fee charged by the payment partner, not by the insurer itself, and that the fee is non-refundable. Its website also says premium receipts are issued only for the premium, not the convenience charge, and that the charge is forfeited even if a refund or chargeback occurs. Customers can ask to deactivate standing instructions on a credit card, while the insurer says auto-debit from a bank account is preferable.
Cost helps explain why the market does not default to UPI AutoPay even when it is quicker for customers. A PhonePe spokesperson told Mint that setting up a SIP through UPI AutoPay “hardly takes a few seconds”. But Mayank Lavania, a senior product manager at Fisdom, said the economics look different from the platform side: “We have to give them around ₹5 for every registration, and another ₹3 for every debit. Then there is an annual maintenance charge, too.” Mint reported that only a handful of platforms, including PhonePe and Groww, were then offering UPI AutoPay for SIPs, while eNACH was available more widely.
Taken together, the RBI rule change and insurer practice point to a broader lesson for insurance payments in India: the challenge is no longer simply collecting the first premium. Providers need a recurring-payment set-up that can handle higher-value renewals, switch between UPI and bank-based mandates, and preserve customer safeguards even as the debit becomes more automatic. The central bank’s December 2023 changes removed one important bottleneck. They did not eliminate the operational trade-offs over bank support, fees, payment limits or how an insurer steers customers between cards, UPI and account-based auto-debit.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
