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Its purpose is to simplify the process of premium payment for life and health insurance, allowing policyholders to block the required amount in their bank accounts.
IRDAI announced the BIMA-Asba for premium payment.
Insurance Regulatory and Development Authority of India (IRDAI) has introduced a new payment mechanism for policyholders known as BIMA -SBA (application supported by blocked amount). This helps policyholders block funds for premium payment through integrated payment interface (UPI).
Its purpose is to simplify the process of premium payment for life and health insurance, allowing policyholders to block the required amount in their bank accounts.
Until the policy is issued, the money remains in their accounts, ensuring a spontaneous transaction without immediate debit. This will be effective from March 01, 2025.
How Bima-SASBA works
Once the fund is blocked, it will be transferred only after the release of the release. Customers can authorize insurers to block a specific amount in their bank accounts through one -time mandate (OTM) through UPI. If the insurance motion is not accepted on time, the fund can be unlocked.
Step-by-step process of Bima-SASBA through UPI
Choosing bima-sasba: Policy holders should select this option while applying.
Fund blocking: The insurer, through its partner bank, requests the bank to block the premium amount.
Consent and blocked: The bank obtains the consent of the policyholder to block funds. Once approved, the insurer is informed.
waiting period: The blocked money remains in the account, potentially earns interest, but is unusable to the insurer’s decision.
Payment on approval: If approved, the insurer requests the bank to move the blocked premium.
Regulation on rejection/cancellation: If rejecting or canceled, the blocked money is completely returned.
If the application is not processed within 14 days, the partner bank automatically unblock the fund.
