Bima-ASBA facility will eliminate unauthorised deductions, say insurance sector players
Irdai's decision to implement ASBA facility for insurance premium payment will benefit customers by eliminating unauthorised deductions and delayed refunds, say experts. Insurance Regulatory and Development Authority of India (Irdai) has directed life and health insurers to provide Bima-ASBA, a facility wherein a policyholder blocks the amount towards premium in his or her bank account which gets debited only when the policy is issued.
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Insurers have been asked to implement the new payment mechanism Bima-ASBA (Applications Supported by Blocked Amount) through Unified Payments Interface (UPI).
ASBA facility or blocking of funds through UPI is widely used by retail investors in stock market.
Commenting on the Irdai's decision, Jitendra Attra, Chief Financial Officer, SBI General Insurance said Bima-ASBA is a significant step toward enhancing transparency, security, and ease in insurance premium payments.
«By enabling policyholders to authorise premium payments directly from their bank accounts, Bima-ASBA ensures greater control over transactions, eliminating issues like unauthorised deductions and delayed refunds. This will particularly benefit customers who prefer a hassle-free and automated payment mechanism while ensuring their funds remain secure until policy issuance,» Attra said.
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