Mutual fund e-mandate limit without AFA increased to Rs 1 lakh

Mutual fund investors can invest more in mutual funds via e-mandates without AFA or Additional Factor of Authentication. The RBI governor Shaktikanta Das said on Friday that it is proposed to exempt the requirement of AFA for transactions up to Rs 1 lakh for the following categories like subscription to mutual funds, payment of insurance premium and payments of credit card bills.

The governor was announcing the decision of the Monetary Policy Committee or MPC. The MPC has decided to hold the policy rate - the Repo Rate - at 6.5%. The central bank has been pausing since February this year. It has hiked rates by 2.5% before the pause to rein in inflation. For more, read: RBI Policy: Best investment strategy for mutual fund investors.

The framework for processing of e-mandates for recurring transactions was introduced in August 2019 to balance the safety and security of digital transactions with customer convenience. The limits for execution of e-mandates without Additional Factor of Authentication (AFA) currently stands at Rs 15,000 (last updated in June 2022).


The number of e-mandates registered currently stands at 8.5 crore, processing nearly Rs 2,800 crores of transactions per month. The system has stabilised, but in categories such as subscription to mutual funds, payment of insurance premium and credit card bill payments, where the transaction sizes are more than Rs 15,000, a need to enhance the limit has been expressed as adoption has been lagging, the RBI said.

The other existing requirements such as pre- and post-transaction notifications, opt-out facility for user, etc. shall continue to apply to these transactions. The revised circular will be issued shortly, the RBI said.