The National Payments Corporation of India (NPCI) on July 03, 2026, issued addendum to OC-128 Extension of additional response codes under Deemed Debit for mandate execution.
The addendum to UPI Operational Circular OC-128 revises the scope of Deemed Debit (DD) for mandate execution transactions based on ecosystem feedback. Response codes such as 59 and K1 (suspected fraud) are now included under DD applicability when declined by the Remitter Bank, while codes like VO (court order), VH (tampered mandate), VU/QD (expired mandate), and VS (duplicate mandate) are excluded from DD. No other response codes have been modified.
For specific use cases such as IPO, RDS, and SBMD secondary market transactions (purpose codes ‘01’, ‘25’, ‘76’ with MCC 6211), transactions declined under excluded response codes (VO, VH, VU, QD, VS) may still be claimed by the Acquirer/Payee via the BGGD mechanism if aligned with the mandate. However, for other OTM use cases, such declines must be treated as final, and no service should be rendered. All other declined or unresponded transactions (outside these codes) will continue to be treated as Deemed Debit, with settlement processed accordingly.
Additionally, member banks must ensure strict and genuine usage of decline codes, adopt the ‘DD’ identifier in URCS for tracking deemed debit transactions, and utilize provided reports for reconciliation. Operational guidelines include mandatory three-way reconciliation, timely mandate execution, auto-unblocking of funds after mandate expiry, and handling of chargebacks for delayed or duplicate transactions. These revised provisions will come into effect from July 15, 2026.
[Notification No. NPCI/UPI/OC-128A/2026-27]
