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Economy
Mahesh

08/12/22 08:40 AM IST

RBI to introduce single-block-and-multiple debits functions in UPI

In News
  • While announcing the December monetary policy, RBI recently decided to introduce the functionality of a single-block-and-multiple debit in UPI.
Single block & Multi-debit
  • The single block multiple debit feature of the UPI will enable users to separate and block funds in their accounts for specific purposes.
  • This feature enables customers to create a payment mandate against a merchant by blocking funds in their bank account for specific purposes that can be debited as per the needs.
  • It will enable ease of e-commerce transactions and smooth transactions in securities market.
  • It will be especially useful for hotel bookings, purchase of securities in the secondary capital market, and purchase of government securities using RBI’s Retail Direct scheme.
  • This will ensure merchants the timely payments from customers, while the funds will remain in the customers’ account until the actual delivery of goods or services is made.
Significance
  • The development will be helpful for hotel bookings, the purchase of securities in the secondary capital market as also purchase of government securities using the RBI’s Retail Direct scheme, e-commerce transactions, etc.
  • It will build a higher degree of trust in transactions as merchants will be assured of timely payments, while the funds remain in the customer’s account till the actual delivery of goods or services.
  • Unified Payments Interface (UPI) has emerged as a popular retail payments system for Person to Person (P2P) and Person to Merchant (P2M) transactions.
  • More than 70 lakh autopay mandates are handled every month and more than half of Initial Public Offer (IPO) applications are processed using the block feature of UPI.
Source- Live Mint

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