Introduction
The Reserve Bank of India (“RBI”) published the Digital Payments E-Mandate Framework 2026 (“Direction”) on April 21, 2026, in accordance with its legal authority under the Payment and Settlement Systems Act, 2007 (“The Act”). The Direction unifies various circulars and guidance pertaining to recurrent digital transactions into a single, cohesive document. The Directions are immediately effective for all providers of payment systems as well as all other parties involved in the processing of recurring payments made using cards or prepaid payment instruments (PPIs) as well as using UPI both within India and across borders. The Direction also promotes an environment of safe, efficient digital payments by clarifying regulatory expectations and enhancing consumer protections in response to the rapid growth of automated payment systems and subscription service models.
Consolidation of Existing Guidelines and Expanded Applicability
The disposal of e-mandate guidelines will allow for uniformity in regulation between existing, disparate regulations as well as reduce operational complexity from numerous interpretations of existing regulations in which it consolidation of multiple circulars issued between 2019 and 2024. With the introduction of cross-border recurring transactions along with domestic recurring transactions, banks, issuers, and payment aggregators will benefit from a unified regulatory environment in both payments systems and jurisdictions that are currently experiencing increasing growth in digital services and subscription models. Through the consolidation of these regulations, compliance will be easier for banks, issuers, and payment aggregators. Furthermore, by increasing the level of regulatory oversight over the digital payments model, it will create a more cohesive, future-ready digital payments framework.
Strengthened Authentication and Lifecycle Governance of E-Mandates
The RBI’s framework establishes an authentication system that includes an AFA (“Additional Factor of Authentication”) requirement for customers when registering and at the time of using e-mandate for the first transaction. This ensures all customers have given permission via AFA to create an e-mandate and also AFA permission to modify an existing e-mandate. AFA also helps prevent against any unauthorised changes to a mandate and therefore protects the entire lifecycle of the mandate by requiring AFA at any point of modification or cancellation of a mandate.
If a customer were to register under the e-mandate and use the e-mandate within the same transaction, the first transaction will still require AFA prior to processing. The use of AFA for creating and using an e-mandate represents the proposed balance between security and operational efficiency through the full lifecycle of the e-mandate due to the emphasis on customer consent.
Customer-Centric Design and Flexibility in Mandates
Under the newly-established framework by the RBI, known as the 2026 framework, one of the most significant areas of focus is increasing consumer autonomy over their e-mandate usage and relative flexibility in choice of usage through e-mandates. Now, Consumers can opt into either fixed amount or variable amount for their e-mandate set up. Furthermore, if a variable e-mandate has been setup by a consumer, the issuer must incorporate a maximum transaction limit for the consumer in order to protect the consumer from unexpected or excessive debiting from their account.
In addition to this, e-mandates will also detail a validity period for the e-mandate and the consumer will have the ability to update or revoke it at any time, provided they have gone through AFA validation process. This will ensure that consumers continue to work within their financial capability before or during transacting and will not have to deal with being bound to long-term e-mandate agreements. Consumers using e-mandate will also have the option of choosing methods for receiving pre-transaction notifications and will have the ability to modify their notification preferences at any time. Although a lot of the above is about promoting greater user awareness, transparency, and ability to intervene in a timely manner, all of these factors collectively increase the lifecycle control for consumers, reinforce informed consent of the consumer, and ultimately represent a significant step towards creating a more transparent, flexible and user-driven digital payments ecosystem.
Transparency Through Pre and Post-Transaction Notifications
Transparent notification system is one of the critical building blocks of RBI’s 2026 payments framework to ensure transparency around transactions and reduce unauthorised transactions. To this end, all issuers will be required to send pre-transaction notifications at least 24 hours prior to conducting any debit transaction providing details of the transaction – the merchant name, the amount, date/time of debit, a mandate reference number and the reason for the transaction.
This pre-transaction communication provides an opportunity for customers to review, verify their intent to proceed with the transaction, or cancel a transaction before it occurs – through actions requiring AFA verification which ensure that customers have visibility into and control over their recurring payment transactions. To further enhance transparency, the framework requires issuers to send full post-transaction notifications providing details related to processing along with files for grievance redressal. Limited exemptions for high-frequency usage cases such as FASTag and auto-replenishment of the National Common Mobility Card (NCMC) will be permitted as well. Together, this will provide a comprehensive approach to transparency, accountability and protection of customers in the digital payments ecosystem.
Transaction Thresholds, Risk Controls and Consumer Protection Measures
The RBI has developed its 2026 regulation on transaction limits to create a balance of security with the efficiency of transactions using a controlled and risk-based methodology. The regulation permits recurring transactions of up to ₹15,000 to be processed without AFA; however, there are exceptions to this rule depending on types of essential obligations (e.g., insurance premiums, mutual fund subscriptions and credit card bill payments), which will allow for recurring transactions of up to ₹1,00,000. Any recurring transaction above these amounts must undergo AFA as part of the verification process and will be reviewed more extensively as they consist of a larger debit amount.
Additionally, the 2026 regulation includes a requirement that appropriate mechanisms for the resolution of disputes and grievances must be established by financial institutions. The regulation provides formal means for customers to submit complaints about transaction items and also specifically extends the provisions of the current regulatory framework limiting customer liability for an unauthorised electronic transaction to e-mandates. Also, issuers of e-mandates cannot charge customers for applying for the e-mandate and acquirers also have an active duty to ensure that merchant compliance with the prescribed guidelines is adhered to at all times. Ultimately, the various provisions serve to strengthen consumer protections; create institutional accountability; establish cohesive regulatory objectives that provide ease of performing transactions while simultaneously providing protection for consumers.
AMLEGALS Remarks
The new Direction by the RBI is another important step forward for regulating recurring payments (payment arrangements set up by customers) through digital means in India. This framework brings all prior circulars associated with recurring payments into one place which reduces the overall fragmentation associated with recurring payments and improves the regulatory clarity and operational efficiencies for the associated parties.
The framework proposes strong authentication and transparency through the use of notification processes, and provides customers with better control through more customer-friendly arrangements as well as improved acknowledgement, such as through texting or e-mail notifications, of their recurring payments with higher limits than existing arrangements. Flexibility for designing the e-mandate by customers will continue the proliferation of automated payments to customers.
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