RBI Introduces Single-Block-And-Multiple-Debit Functionality In UPI Also, RBI has plans to expand the scope of Bharat Bill Payment System (BBPS) to include all categories of payments and collections, both recurring and non-recurring in nature

By Teena Jose

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

UPI Logo: UPI Twitter handle

On the backdrop of the December monetary policy, on Wednesday, the Reserve Bank of India (RBI) has augmented the potentialities of Unified Payments Interface (UPI) by introducing the functionality of a single-block-and-multiple-debit in UPI.

"This will significantly enhance the ease of making payments for investments in securities including through the retail direct platform as well as e-commerce transactions," said Shaktikanta Das, in a statement.

Furthermore, it allows a customer to enable a payment mandate against a merchant by blocking funds for specific purposes in his or her bank account which can be debited, whenever needed.

According to experts, as quoted in a news report, this feature will offer a push to the already burgeoning payment volumes of UPI. Currently, UPI enables mandates for recurring transactions and single-block-and-single-debit functionality.

"RBI's announcement with respect to UPI payments and Bharat Bill Payment Systems are encouraging in the payments ecosystem. The RBI's announcement around increasing that capacity of UPI by introducing single-block-and-multiple-debits functionality, will enble users to block funds in their account, which can be debited at the time of need. India, as an economy, has already witnessed a rapid rise in the digital payments, logging 23.06 billion transactions amounting INR 38.3 lakh crore in the third quarter this year. RBI's recent efforts with respect to digital payments will certainly contribute towards the cashless economy imperative," said Akash Sinha, CEO and co-founder of Cashfree Payments, while sharing the viewpoints regarding the government's role in the digital payments ecosystem.

In a statement on the development and regulatory policies, RBI said that UPI has features that enable processing of mandates for recurring transactions and single-block-and-single-debit functionality. Thereby, as per reports, more than 70 lakh autopay mandates are handled every month, and more than half of the initial public offer (IPO) applications are processed using the block feature.

RBI will reportedly issue the instructions to National Payments Corporation of India (NPCI), which runs and manages UPI, on this functionality shortly. Also, RBI has plans to expand the scope of Bharat Bill Payment System (BBPS) to include all categories of payments and collections, both recurring and non-recurring in nature.

On top of that, this feature will build a higher degree of trust in transactions as merchants will be assured of timely payments, while the funds continue in the customer's account until delivery of goods or services, as per the RBI statement.

It also added that this new functionality will play a crucial role in forming the framework for blocking money for secondary market trades, a mechanism called Application Supported by Blocked Amount (ASBA), which the capital market regulator is planning to implement.

Likewise, this is also expected to be useful in the Securities and Exchange Board of India's idea of developing an ASBA payment system for the secondary market, whereby T+1 settlement would get a boost.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Related Topics

News and Trends

The Transformative Power Of Entrepreneurial Households In Shaping The Future Of The Indian Economy

According to the report, India's 247 million entrepreneurial households drove an $8.8 trillion transaction value in FY23 unleashing a new economic landscape.


International Security Firm Welcomes Female India Native to an Essential Leadership Position

Yasmin Brar has been appointed as the Operations Strategy Director, a role that underscores the company's commitment to innovation, expansion, and strategic management

Growing a Business

The Owners of This Texas Farmers Market Took a Big Gamble. Here's How It Paid Off Bigger Than They Dreamed.

A Texas farmers market educates customers about the importance of shopping local for a healthy lifestyle and an even healthier small business community.

Thought Leaders

8 Reasons Why We Need Entrepreneurs Now More Than Ever

Entrepreneurship is the driving force behind the global economy's growth. Now more than ever, we need new entrepreneurs to spur innovation.

News and Trends

Kaynes Semicon To Invest INR 4,000 Crore On OSAT/ATMP

The investment is expected to create around 1,000-plus jobs