{"id":21279,"date":"2025-03-06T12:39:30","date_gmt":"2025-03-06T07:09:30","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=21279"},"modified":"2025-04-24T14:25:01","modified_gmt":"2025-04-24T08:55:01","slug":"irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/","title":{"rendered":"Understanding IRDAI\u2019s Bima-ASBA: New UPI-Based Payment System for Insurance Premiums"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The Indian insurance sector is poised for a major shift in how premiums are paid with the introduction of <\/span><b>Bima-ASBA (Applications Supported by Blocked Amount)<\/b><span style=\"font-weight: 400;\"> guidelines by the Insurance Regulatory and Development Authority of India (IRDAI). Starting March 1st, 2025, insurers will be required to block the premium amount in the policyholder&#8217;s account and only debit it once underwriting is successfully completed. This change necessitates the adoption of UPI One-Time Mandates, impacting how insurers collect payments from customers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this blog, we&#8217;ll delve into the mechanics of Bima-ASBA, explore its impact on both policyholders and insurers, and discuss why it represents a significant advancement in insurance payments.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d41f88050f9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d41f88050f9\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#What_is_IRDAIs_Bima-ASBA\" >What is IRDAI\u2019s Bima-ASBA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#How_Do_Insurers_Get_Compliant_with_this_Circular\" >How Do Insurers Get Compliant with this Circular?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#What_are_UPI_One-Time_Mandates\" >What are UPI One-Time Mandates?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Key_Benefits_of_Bima-ASBA\" >Key Benefits of Bima-ASBA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Example_Use_Case_How_UPI-Linked_Bima-ASBA_Works\" >Example Use Case: How UPI-Linked Bima-ASBA Works<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Why_Did_the_IRDAI_Introduce_Bima-ASBA\" >Why Did the IRDAI Introduce Bima-ASBA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Optional_Nature_of_Bima-ASBA_for_Policyholders\" >Optional Nature of Bima-ASBA for Policyholders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Technology_Behind_Bima-ASBA_How_UPI_One-Time_Mandates_Power_the_System\" >Technology Behind Bima-ASBA: How UPI One-Time Mandates Power the System<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Why_Do_Businesses_Need_to_Adopt_Bima-ASBA_Compliance\" >Why Do Businesses Need to Adopt Bima-ASBA Compliance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Razorpays_Key_Features_for_Bima-ASBA_Compliance\" >Razorpay&#8217;s Key Features for Bima-ASBA Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/#Frequently_Asked_Questions_FAQs\" >Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_IRDAIs_Bima-ASBA\"><\/span><b>What is IRDAI\u2019s Bima-ASBA?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA (Applications Supported by Blocked Amount) is a UPI-based payment system introduced by <\/span><a href=\"https:\/\/irdai.gov.in\/\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">IRDAI<\/span><\/a><span style=\"font-weight: 400;\">, enabling insurance companies to block the policyholder\u2019s premium amount in their bank account during the underwriting process. Unlike the previous system, where insurers debited the premium upfront\u2014sometimes leading to adjustments or refunds\u2014this new method ensures that the <\/span><b>funds remain in the customer\u2019s account<\/b><span style=\"font-weight: 400;\"> until the policy is approved.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Effective from March 1, 2025, Bima-ASBA leverages <\/span><a href=\"https:\/\/razorpay.com\/blog\/locking-in-trust-introducing-one-time-mandates-on-upi\/\"><span style=\"font-weight: 400;\">UPI One-Time Mandates<\/span><\/a><span style=\"font-weight: 400;\"> to block the required amount in the policyholder\u2019s account at the time of application. The blocked amount is only deducted once the insurer completes underwriting and issues the policy. If the application is rejected or withdrawn, the reserved funds are automatically released.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This system works similarly to <\/span><b>ASBA in IPOs<\/b><span style=\"font-weight: 400;\">, where funds stay in the investor\u2019s account until shares are allotted. With Bima-ASBA, the premium remains securely blocked until the insurer completes underwriting, ensuring <\/span><b>greater transparency and control<\/b><span style=\"font-weight: 400;\"> over payments.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As of <\/span><b>March 1, 2025, Bima-ASBA is mandatory for insurers<\/b><span style=\"font-weight: 400;\">, while policyholders have the option to use it. By reducing payment failures and improving transaction security, Bima-ASBA is making insurance premium payments more seamless and efficient.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Do_Insurers_Get_Compliant_with_this_Circular\"><\/span><b>How Do Insurers Get Compliant with this Circular?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Insurance companies now need to offer UPI One-Time Mandates to their customers at checkout to comply with the IRDAI\u2019s Bima-ASBA guidelines. This ensures that policyholders&#8217; premium amounts are securely blocked in their bank accounts during underwriting and only deducted upon policy approval.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_UPI_One-Time_Mandates\"><\/span><b>What are UPI One-Time Mandates?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA uses UPI\u2019s One-Time Mandate (OTM) system to securely block premium amounts in policyholders\u2019 bank accounts. Funds are only debited upon policy approval, ensuring control, security, and continued interest earnings until underwriting is complete.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.typeform.com\/to\/J5PRrVHW#source=SEO\" rel=\"nofollow noopener\" target=\"_blank\">Sign up for UPI One Time Mandates<\/a><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Benefits_of_Bima-ASBA\"><\/span><b>Key Benefits of Bima-ASBA<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA enhances the insurance payment process by making it more seamless, transparent, and efficient for policyholders.<\/span><\/p>\n<ul>\n<li><b>Less Friction:<\/b><span style=\"font-weight: 400;\"> Policyholders no longer need to worry about refund delays if a policy application is rejected. The blocked amount is automatically released, eliminating the need for follow-ups.<\/span><\/li>\n<li><b>Increased Transparency:<\/b><span style=\"font-weight: 400;\"> Funds remain in the customer\u2019s account until the policy is issued, ensuring insurers do not benefit from float income. This builds trust and provides complete visibility into the payment process.<\/span><\/li>\n<li><b>Interest Retention:<\/b><span style=\"font-weight: 400;\"> Since the premium is debited only after approval, policyholders continue to earn interest on the blocked amount during the underwriting process, which can take over 15 days.<\/span><\/li>\n<li><b>Convenience:<\/b><span style=\"font-weight: 400;\"> Customers can ensure sufficient funds are available without immediate deductions, making budgeting easier and premium payments stress-free.<\/span><\/li>\n<li><b>Automatic Refunds:<\/b><span style=\"font-weight: 400;\"> If an application is rejected or withdrawn, the blocked amount is swiftly released, ensuring a smooth and hassle-free experience.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Example_Use_Case_How_UPI-Linked_Bima-ASBA_Works\"><\/span><b>Example Use Case: How UPI-Linked Bima-ASBA Works<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><strong>Scenario: Anil&#8217;s Life Insurance Application<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Anil, a prospective policyholder, applies for a life insurance policy with InsureLife Insurance Company. Unsure of whether he will be allotted the policy, Anil opts for Bima-ASBA instead of paying the premium upfront, authorizing his bank to block the premium amount via UPI.<\/span><\/p>\n<h4><b>Application Process<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Anil fills out the life insurance proposal form, and selects the Bima-ASBA option. He provides his UPI ID linked to his bank account to authorize the premium blocking.<\/span><\/p>\n<h4><b>Bank Authorization<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">After submitting the proposal, Anil receives a UPI request from his bank to block the premium amount. Once he approves, the bank blocks the specified amount, ensuring that it remains in his account but cannot be used for other transactions.<\/span><\/p>\n<h4><b>Insurer Notification<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">InsureLife Insurance Company receives confirmation that Anil\u2019s premium amount is blocked. At this stage, the insurer is assured of payment authorization, though the funds have not yet been deducted.<\/span><\/p>\n<h4><b>Underwriting Process<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">InsureLife begins its underwriting process, reviewing Anil\u2019s application, documents, and medical reports (if required). This process may take up to 14 days.<\/span><\/p>\n<h4><b>Policy Approval &amp; Premium Deduction<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">If Anil\u2019s policy is approved, InsureLife instructs the bank to debit the blocked amount. The premium is transferred to the insurer\u2019s account, and the policy is issued.<\/span><\/p>\n<h4><b>Policy Rejection Scenario<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">If InsureLife rejects Anil\u2019s application based on underwriting criteria, the insurer notifies the bank to release the blocked amount. The funds are unblocked in Anil\u2019s account without any deductions or delays.<\/span><\/p>\n<h4><b>Cancellation Scenario<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">If Anil decides to cancel his application before underwriting is complete, he submits a cancellation request to InsureLife. The insurer then instructs the bank to release the blocked amount within one working day.<\/span><\/p>\n<h3><b>Benefits for Anil<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>No Upfront Payment:<\/b><span style=\"font-weight: 400;\"> The premium remains in his account until the policy is approved, reducing financial risk.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Interest on Blocked Amount:<\/b><span style=\"font-weight: 400;\"> The blocked funds continue earning interest during the underwriting process.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Transparency &amp; Security:<\/b><span style=\"font-weight: 400;\"> The funds are only deducted if the policy is approved, and if rejected or canceled, the amount is automatically released.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Bima-ASBA ensures Anil only pays for a policy if it is issued, making premium payments more seamless and hassle-free compared to traditional methods.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_Did_the_IRDAI_Introduce_Bima-ASBA\"><\/span><b>Why Did the IRDAI Introduce Bima-ASBA?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Insurance Regulatory and Development Authority of India (IRDAI) introduced Bima-ASBA to enhance transparency and simplify premium payments while safeguarding policyholders&#8217; interests. This move aligns with the <\/span><b>Master Circular on the Protection of Policyholder\u2019s Interests<\/b><span style=\"font-weight: 400;\"> issued in September 2024, which outlined key guidelines for premium payments:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Premium payments should only be made after policy approval.<\/b><span style=\"font-weight: 400;\"> Insurers must communicate their underwriting decision before collecting premiums, ensuring that policyholders pay only for accepted policies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Risk coverage begins only upon receipt of the premium.<\/b><span style=\"font-weight: 400;\"> This ensures that coverage is granted only after payment confirmation, preventing any ambiguity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>No deposits are required at the time of application.<\/b><span style=\"font-weight: 400;\"> Except in cases where policies are issued based on a declaration of good health, insurers cannot collect proposal deposits alongside the application. This prevents under- or over-collection of premiums.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Explicit consent is mandatory for premium deductions.<\/b><span style=\"font-weight: 400;\"> Insurers must obtain clear approval from policyholders before deducting premium amounts from their bank accounts.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Bima-ASBA was introduced in response to industry requests to streamline premium collection while ensuring policyholder protection. This facility not only makes premium payments more seamless but also aligns with IRDAI\u2019s goal of improving operational efficiency in the insurance sector.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Optional_Nature_of_Bima-ASBA_for_Policyholders\"><\/span><b>Optional Nature of Bima-ASBA for Policyholders<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA is an <\/span><b>optional<\/b><span style=\"font-weight: 400;\"> facility designed to enhance convenience for policyholders, but customers are <\/span><b>not required<\/b><span style=\"font-weight: 400;\"> to use it. The IRDAI mandates that insurers <\/span><b>must offer<\/b><span style=\"font-weight: 400;\"> Bima-ASBA as an option for life and health insurance policies, but policyholders can still choose to pay premiums through traditional methods.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Importantly, insurers <\/span><b>cannot reject an application<\/b><span style=\"font-weight: 400;\"> simply because a prospect decides not to use Bima-ASBA. The IRDAI requires insurers to include a standard declaration in proposal forms, allowing applicants to choose whether they want to authorise premium payments via the Bima-ASBA mechanism. Regardless of the payment method chosen, all existing regulatory protections for policyholders remain intact.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Technology_Behind_Bima-ASBA_How_UPI_One-Time_Mandates_Power_the_System\"><\/span><b>Technology Behind Bima-ASBA: How UPI One-Time Mandates Power the System<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA leverages <\/span><b>UPI\u2019s One-Time Mandate (OTM)<\/b><span style=\"font-weight: 400;\"> system, a type of <\/span><a href=\"https:\/\/razorpay.com\/blog\/what-is-razorpay-emandate\/\"><span style=\"font-weight: 400;\">E-Mandate<\/span><\/a><span style=\"font-weight: 400;\">, a technology that enables secure and controlled fund blocking. This system allows policyholders to <\/span><b>authorise the blocking of their premium amount in their bank account<\/b><span style=\"font-weight: 400;\">, ensuring that funds are only debited once the insurer approves the policy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Similar to the <\/span><b>ASBA mechanism used in IPO applications<\/b><span style=\"font-weight: 400;\">, the blocked amount remains in the policyholder&#8217;s bank account, continuing to earn interest until the underwriting process is completed. If the policy is not approved or is not processed within <\/span><b>14 days<\/b><span style=\"font-weight: 400;\">, the blocked amount is automatically released, ensuring policyholder funds remain secure and accessible.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_Do_Businesses_Need_to_Adopt_Bima-ASBA_Compliance\"><\/span><b>Why Do Businesses Need to Adopt Bima-ASBA Compliance?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Adopting Bima-ASBA compliance offers multiple advantages for insurers, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Customer Trust:<\/b><span style=\"font-weight: 400;\"> Providing a secure and transparent payment mechanism enhances policyholders\u2019 confidence in the insurer. Customers appreciate knowing their funds remain under their control until policy approval.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regulatory Requirements:<\/b><span style=\"font-weight: 400;\"> The IRDAI mandates that insurers offer Bima-ASBA, ensuring adherence to evolving industry regulations while fostering greater compliance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Operational Efficiency:<\/b><span style=\"font-weight: 400;\"> Automating premium collection through UPI OTM reduces administrative workload and minimizes manual errors, streamlining the underwriting and payment process.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Risk Mitigation:<\/b><span style=\"font-weight: 400;\"> Since funds are only deducted after policy approval, Bima-ASBA reduces the risks associated with refund processing, incorrect premium collection, or policy cancellations.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">By integrating Bima-ASBA, insurers can not only enhance their operational processes but also build stronger relationships with their customers, reinforcing trust in the insurance ecosystem.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Razorpays_Key_Features_for_Bima-ASBA_Compliance\"><\/span><b>Razorpay&#8217;s Key Features for Bima-ASBA Compliance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Razorpay is the first <\/span><a href=\"https:\/\/razorpay.com\/upi-payment-gateway-india\/\"><span style=\"font-weight: 400;\">UPI payment gateway<\/span><\/a><span style=\"font-weight: 400;\"> to offer a seamless solution for Bima-ASBA compliance, ensuring insurers can integrate the new regulatory requirements effortlessly. With our advanced <\/span><a href=\"https:\/\/razorpay.com\/blog\/locking-in-trust-introducing-one-time-mandates-on-upi\/\"><span style=\"font-weight: 400;\">UPI One-Time Mandate (OTM)<\/span><\/a><span style=\"font-weight: 400;\"> solution, insurers can enhance operational efficiency while delivering a frictionless experience for policyholders.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Effortless Integration<\/b><span style=\"font-weight: 400;\">: Razorpay\u2019s solution integrates smoothly with existing insurance systems, minimizing disruption and enabling quick adoption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Secure and Reliable<\/b><span style=\"font-weight: 400;\">: Built on industry-leading security standards, our platform ensures every transaction remains safe and compliant.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Automated Mandate Management<\/b><span style=\"font-weight: 400;\">: From mandate creation to tracking and release, our automated system simplifies the entire process.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Real-time Visibility<\/b><span style=\"font-weight: 400;\">: Insurers get instant access to the status of blocked amounts, ensuring transparency and better financial control.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><b>Conclusion<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Bima-ASBA marks a significant step forward in transforming insurance premium payments, offering greater security, transparency, and efficiency for both insurers and policyholders. By leveraging UPI One-Time Mandates, this system ensures policyholders retain control over their funds until policy approval, reducing friction and enhancing trust in the insurance process. As insurers move toward compliance, adopting seamless solutions like Razorpay\u2019s Bima-ASBA integration can streamline operations and improve customer experience. With regulatory backing and growing adoption, Bima-ASBA is set to redefine the way insurance payments are handled in India.<\/span><\/p>\n<h2 dir=\"ltr\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><strong>1. What is the deadline for insurance companies to implement the necessary systems for Bima-ASBA compliance?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Insurance companies must ensure that their systems are ready for Bima-ASBA compliance by <\/span><b>March 1, 2025<\/b><span style=\"font-weight: 400;\">. After this date, customers must have the option to chooseOne Time Mandates on checkout when applying for a policy.\u00a0<\/span><\/p>\n<h3><strong>2. Is Bima-ASBA mandatory for all policyholders?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Bima-ASBA is currently applicable only for new policies that meet the regulatory criteria. Additionally, it is not mandatory for policyholders to choose the One Time Mandates option at checkout.\u00a0<\/span><\/p>\n<h3><strong>3. Will the UPI-linked Bima-ASBA facility be available for all insurance policies?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">IRDAI guideline states Bima-ASBA is applicable on all Life &amp; Health Insurance policies for now.\u00a0<\/span><\/p>\n<h3><strong>4. If a customer no longer wants the mandate after accepting it, can they or the merchant cancel it? If yes, how?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Once a customer has accepted a mandate, they cannot cancel it themselves. Only the merchant has the authority to cancel the mandate if needed.<\/span><\/p>\n<h3><strong>5. Is the 14-day expiry period for the Bima-ASBA mandate calculated by date or time of creation?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">The 14-day expiry period for the Bima-ASBA mandate is determined by the merchant, who sets it in the expiry parameter at the time of mandate creation.<\/span><\/p>\n<h3><strong>6. Can UPI OTM (One-Time Mandate) be supported on RuPay Credit Cards?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, UPI OTM can be supported on <\/span><b>RuPay Credit Cards<\/b><span style=\"font-weight: 400;\">, allowing users to set up recurring payments directly through their credit card.<\/span><\/p>\n<h3><strong>7. Since OTM revocation functionality is not available, if merchants use the token delete API, will the hold be released?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">No, deleting the token does not automatically release the hold. Until the OTM revocation feature is introduced, the mandate will remain active unless manually canceled by the customer.<\/span><\/p>\n<h3><strong>8. How long will the funds be blocked under Bima-ASBA?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">The funds will remain blocked until the premium payment is approved and settled or until the <\/span><b>14-day mandate expiry period<\/b><span style=\"font-weight: 400;\"> is reached.<\/span><\/p>\n<h3><strong>9. What happens if a customer\u2019s mandate is not approved within the 14-day block period?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">If the mandate is not approved within <\/span><b>14 days<\/b><span style=\"font-weight: 400;\">, it will expire automatically, and the blocked funds will be released back to the customer\u2019s account.<\/span><\/p>\n<h3><strong>10. Can insurers charge extra fees for using Bima-ASBA?<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">No, insurers are not allowed to charge any additional fees for using the Bima-ASBA payment facility. The process must be free for policyholders.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Indian insurance sector is poised for a major shift in how premiums are paid with the introduction of Bima-ASBA (Applications Supported by Blocked Amount) guidelines by the Insurance Regulatory and Development Authority of India (IRDAI). Starting March 1st, 2025, insurers will be required to block the premium amount in the policyholder&#8217;s account and only<\/p>\n","protected":false},"author":142,"featured_media":21512,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[498],"tags":[],"class_list":{"0":"post-21279","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upi"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/21279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/142"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=21279"}],"version-history":[{"count":1,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/21279\/revisions"}],"predecessor-version":[{"id":21281,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/21279\/revisions\/21281"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/21512"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=21279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=21279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=21279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}