FUNCTION BATCH(numTABLE_ID IN NUMBER, varSTMT IN VARCHAR2) RETURN NUMBER IS

BEGIN

    INSERT INTO BATCH_STATEMENT(QUEUE_ID,TABLE_ID,STATEMENT,QUEUE_SEQUENCE_ID)
    VALUES (numQUEUE_ID,numTABLE_ID,varSTMT,1);

    RETURN 1;

EXCEPTION WHEN OTHERS THEN
    PROC_LOG('Failed in BATCH');
    PROC_LOG('SQL Error : ' || SUBSTR(SQLERRM,1,1000));
    RETURN -1;
END BATCH;
-------------------------------------------------------------------------------
FUNCTION DOWNLOAD_FUNC(numMERCHANT_NUMBER Number) RETURN VARCHAR2 IS
varRETURN_VALUE       VARCHAR2(25):= NULL;

numALLOWED_COUNT           PROD.COUNTER.ALLOWED_COUNT%TYPE;
numLAST_COUNT_ADDED        PROD.COUNTER.LAST_COUNT_ADDED%TYPE;
dtCHANGE_DATE              DATE := NULL;
myVar                      VARCHAR2(32767);
varSTMT                    VARCHAR2(32767);
Yes_SAS_Mer          VARCHAR2(1);
blnSAS_Allowed             BOOLEAN ;

BEGIN
            
            BEGIN 
                SELECT  'Y' into Yes_SAS_Mer
                FROM  PROD.SAS_ASSIGNED_MERCHANTS  sam
                   WHERE sam.MERCHANT_NUMBER = numMERCHANT_NUMBER;
                   dbms_output.put_line('GDS_MERCHANT_NUMBER FOUND : ' ||  numMERCHANT_NUMBER);
             EXCEPTION WHEN OTHERS
                THEN
                  dbms_output.put_line('ERROR IN SAM SELECT : ' || SUBSTR (SQLERRM, 1, 1000));
             END;

            BEGIN
               SELECT CHANGE_DATE, LAST_COUNT_ADDED, ALLOWED_COUNT
               INTO dtCHANGE_DATE, numLAST_COUNT_ADDED, numALLOWED_COUNT
               FROM PROD.COUNTER
               WHERE PROCESS_NAME = 'DAILY' AND COUNTER_IND = 'ABCD'  AND PROCESS_FLAG  = 'Y';
                 IF dtCHANGE_DATE <= TRUNC(SYSDATE)  THEN
                        numLAST_COUNT_ADDED := 0;
                 END IF;
            EXCEPTION WHEN OTHERS
                THEN
                   numLAST_COUNT_ADDED := 0;
                   numALLOWED_COUNT := 1;
            END;

          IF numALLOWED_COUNT >= numLAST_COUNT_ADDED+1 THEN
             blnSAS_Allowed :=True;
               varSTMT := 'UPDATE PROD.COUNTER ';
              varSTMT := varSTMT ||'SET last_count_added = ' || (numLAST_COUNT_ADDED + 1);
              varSTMT:= varSTMT||' WHERE process_name = ''DAILY''';
              varSTMT := varSTMT ||' AND COUNTER_IND = ''ABCD'''; 
              dbms_output.put_line(' COUNTER STATEMENT FOR UPDATING IS :-' ||varSTMT);


                 IF BATCH(98,varSTMT)>0 THEN
                   NULL;
                 END IF;
          ELSE
           dbms_output.put_line('REACHED MAX ALLOWED COUNT  SO ENDING  :'||SYSDATE);
          END IF;
                  IF (Yes_SAS_Mer='Y') or (Not blnSAS_Allowed) THEN
                      varRETURN_VALUE :='GDS'  ;
                  END IF;

RETURN varRETURN_VALUE ;

EXCEPTION WHEN OTHERS THEN
   dbms_output.put_line('FAILED in  DOWNLOAD_FUNC ');
   dbms_output.put_line('SQL Error : ' || SUBSTR(SQLERRM,1,1000));
    RETURN NULL;
END DOWNLOAD_FUNC;

begin
  begin
    -- process
    exception
       --if an exception occurs exit this block gracefully
  end;
  begin
    --this block will execute even if the previous block raised an error
     --because the previous block still exited gracefully
 --etc etc
end;
/

SQL> set serveroutput on;
SQL> 
SQL> DROP TABLE TESTB;
 
Table dropped
SQL> CREATE TABLE TESTB
  2  (
  3  NUM NUMBER,
  4  sql_stmt VARCHAR2(4000)
  5  );
 
Table created
SQL> CREATE OR REPLACE FUNCTION BATCH(numTABLE_ID IN NUMBER, varSTMT IN VARCHAR2) RETURN NUMBER IS
  2  
  3  BEGIN
  4  
  5      INSERT INTO TESTB
  6      VALUES (numTABLE_ID,varSTMT);
  7  
  8      RETURN 1;
  9  
 10  EXCEPTION WHEN OTHERS THEN
 11      RETURN -1;
 12  END BATCH;
 13  /
 
Function created
SQL> DECLARE
  2  v_sqlstmt VARCHAR2(4000) := 'UPDATE T SET COL1 = 3;';
  3  
  4  BEGIN
  5  
  6      IF BATCH('1',v_sqlstmt) > 0 THEN
  7         DBMS_OUTPUT.PUT_LINE('Done');
  8      ELSE
  9         DBMS_OUTPUT.PUT_LINE('Failed');
 10      END IF;
 11  END;
 12  /
 
Done
 
PL/SQL procedure successfully completed

FUNCTION BATCH(numTABLE_ID IN NUMBER, varSTMT IN VARCHAR2) RETURN NUMBER IS

BEGIN

INSERT INTO BATCH_STATEMENT(QUEUE_ID,TABLE_ID,STATEMENT,QUEUE_SEQUENCE_ID)
VALUES (numQUEUE_ID,numTABLE_ID,varSTMT,1);

RETURN 1;

EXCEPTION WHEN OTHERS THEN
RETURN -1;
END BATCH;
-------------------------------------------------------------------------------
FUNCTION DOWNLOAD_FUNC(numMERCHANT_NUMBER Number) RETURN VARCHAR2 IS
varRETURN_VALUE VARCHAR2(25):= NULL;

PRAGMA AUTONOMOUS_TRANSACTION ;

numALLOWED_COUNT PROD.COUNTER.ALLOWED_COUNT%TYPE;
numLAST_COUNT_ADDED PROD.COUNTER.LAST_COUNT_ADDED%TYPE;
dtCHANGE_DATE DATE := NULL;
myVar VARCHAR2(32767);
varSTMT VARCHAR2(32767);
Yes_SAS_Mer VARCHAR2(1);
blnSAS_Allowed BOOLEAN ;

BEGIN

BEGIN 
SELECT 'Y' into Yes_SAS_Mer
FROM PROD.SAS_ASSIGNED_MERCHANTS sam
WHERE sam.MERCHANT_NUMBER = numMERCHANT_NUMBER;
EXCEPTION WHEN OTHERS
THEN
 NULL;
END;

BEGIN
SELECT CHANGE_DATE, LAST_COUNT_ADDED, ALLOWED_COUNT
INTO dtCHANGE_DATE, numLAST_COUNT_ADDED, numALLOWED_COUNT
FROM PROD.COUNTER
WHERE PROCESS_NAME = 'DAILY' AND COUNTER_IND = 'ABCD' AND PROCESS_FLAG = 'Y';
IF dtCHANGE_DATE <= TRUNC(SYSDATE) THEN
numLAST_COUNT_ADDED := 0;
END IF;
EXCEPTION WHEN OTHERS
THEN
numLAST_COUNT_ADDED := 0;
numALLOWED_COUNT := 1;
END;

IF numALLOWED_COUNT >= numLAST_COUNT_ADDED+1 THEN
blnSAS_Allowed :=True;
varSTMT := 'UPDATE PROD.COUNTER ';
varSTMT := varSTMT ||'SET last_count_added = ' || (numLAST_COUNT_ADDED + 1);
varSTMT:= varSTMT||' WHERE process_name = ''DAILY''';
varSTMT := varSTMT ||' AND COUNTER_IND = ''ABCD'''; 


BEGIN
myvar :=INSERT_BATCH(96,varSTMT) ;
Commit;
IF myvar >0 THEN
NULL;
END IF;

EXCEPTION
WHEN OTHERS THEN
ROLLBACK;
raise_application_error(-20001,'An error was encountered - '||SQLCODE||' -ERROR- '||SQLERRM);
END;

ELSE

END IF;
IF (Yes_SAS_Mer='Y') or (Not blnSAS_Allowed) THEN
varRETURN_VALUE :='GDS' ;
END IF;

RETURN varRETURN_VALUE ;

EXCEPTION WHEN OTHERS THEN

RETURN NULL;
END DOWNLOAD_FUNC;

FUNCTION BATCH(numTABLE_ID IN NUMBER, varSTMT IN VARCHAR2) RETURN NUMBER IS

BEGIN

    INSERT INTO BATCH_STATEMENT(QUEUE_ID,TABLE_ID,STATEMENT,QUEUE_SEQUENCE_ID)
    VALUES (numQUEUE_ID,numTABLE_ID,varSTMT,1);

    RETURN 1;

EXCEPTION WHEN OTHERS 
   THEN   
    RETURN -1;
END BATCH;
-------------------------------------------------------------------------------
FUNCTION DOWNLOAD_FUNC(numMERCHANT_NUMBER Number) RETURN VARCHAR2 IS
varRETURN_VALUE       VARCHAR2(25):= NULL;

numALLOWED_COUNT           PROD.COUNTER.ALLOWED_COUNT%TYPE;
numLAST_COUNT_ADDED        PROD.COUNTER.LAST_COUNT_ADDED%TYPE;
dtCHANGE_DATE              DATE := NULL;
myVar                      VARCHAR2(32767);
varSTMT                    VARCHAR2(32767);
Yes_SAS_Mer          VARCHAR2(1);
blnSAS_Allowed             BOOLEAN ;

BEGIN
            
            BEGIN 
                SELECT  'Y' into Yes_SAS_Mer
                FROM  PROD.SAS_ASSIGNED_MERCHANTS  sam
                   WHERE sam.MERCHANT_NUMBER = numMERCHANT_NUMBER;                  
             EXCEPTION WHEN OTHERS
                THEN
                   null ;
             END;

            BEGIN
               SELECT CHANGE_DATE, LAST_COUNT_ADDED, ALLOWED_COUNT
               INTO dtCHANGE_DATE, numLAST_COUNT_ADDED, numALLOWED_COUNT
               FROM PROD.COUNTER
               WHERE PROCESS_NAME = 'DAILY' AND COUNTER_IND = 'ABCD'  AND PROCESS_FLAG  = 'Y';
                 IF dtCHANGE_DATE <= TRUNC(SYSDATE)  THEN
                        numLAST_COUNT_ADDED := 0;
                 END IF;
            EXCEPTION WHEN OTHERS
                THEN
                   numLAST_COUNT_ADDED := 0;
                   numALLOWED_COUNT := 1;
            END;

          IF numALLOWED_COUNT >= numLAST_COUNT_ADDED+1 THEN
             blnSAS_Allowed :=True;
               varSTMT := 'UPDATE PROD.COUNTER ';
              varSTMT := varSTMT ||'SET last_count_added = ' || (numLAST_COUNT_ADDED + 1);
              varSTMT:= varSTMT||' WHERE process_name = ''DAILY''';
              varSTMT := varSTMT ||' AND COUNTER_IND = ''ABCD'''; 
                  BEGIN
                     myvar :=INSERT_BATCH(96,varSTMT) ;
                      Commit;
                        IF myvar >0 THEN
                          NULL;
                 END IF;

          ELSE
            blnSAS_Allowed :=flase;
          END IF;
                  IF (Yes_SAS_Mer='Y') or (Not blnSAS_Allowed) THEN
                      varRETURN_VALUE :='GDS'  ;
                  END IF;

RETURN varRETURN_VALUE ;

EXCEPTION WHEN OTHERS 
   THEN

    RETURN NULL;
END DOWNLOAD_FUNC;

No UPDATE statement is called in BATCH function (by the way, in DOWNLOAD_FUNC you are calling INSERT_BATCH, which is totally different function).

If you refer to the content of VARSTMT, it is only stored into BATCH_STATEMENT.STATEMENT column of the newly inserted row.

FUNCTION execute_batch_statement return varchar2 is 
varBATCH_STATEMENT           VARCHAR2(32767):= NULL;

CURSOR BATCH_STATEMENT_CUR IS
    SELECT TABLE_ID, STATEMENT
    FROM   BATCH_STATEMENT
    WHERE  QUEUE_ID = numQUEUE_ID  --(this is a sequence_id)
    ORDER BY TABLE_ID,QUEUE_SEQUENCE_ID;

---------------------------------------------
 varBATCH_STATEMENT := BATCH_STATEMENT_REC.STATEMENT;
-----------
 varBATCH_STATEMENT := REPLACE(varBATCH_STATEMENT,'''SYSDATE''','TO_DATE('''||varSYS_DATE_STRING||''',''YYYYMMDDHH24MISS'')');

------------
   EXECUTE IMMEDIATE varBATCH_STATEMENT;

PROCEDURE FINAL(varUPDATE_TYPE VARCHAR2,varTABLE_NAME VARCHAR2 ) IS

CURSOR IM_FIELDS IS (SELECT  F.COLUMN_NAME,F.SELECT_FUNC,F.EXE_FUNC,F.IM_FIELD
              FROM FIELDS F , CHANGE C
              WHERE F.IMP_FIELD IS NOT NULL
              AND F.IM_FIELD = C.FIELD_ID
              AND F.FIELD_ID NOT IN(SELECT C.FIELD_ID FROM CHANGE C, FIELDS F WHERE C.FIELD_ID = F.FIELD_ID AND F.IM_FIELD <>C.FIELD_ID AND C.QUEUE_ID = numQUEUE_ID)
              AND C.QUEUE_ID = numQUEUE_ID --(this Queue_id is a sequence # assigned globaly.)
              AND F.TABLE_NAME = varTABLE_NAME);
              
varDEFAULT              VARCHAR2(255):=NULL;

BEGIN 
  FOR IM_FIELDS_REC IN IM_FIELDS LOOP

        IF varUPDATE_TYPE = 'A' THEN

            varFUNC_RESULT := NULL;
            varFUNC_STATEMENT := NULL;
            IF IMP_FIELDS_REC.EXE_FUNC IS NULL THEN  -- (this column has null value )

                varFUNC_STATEMENT := 'SELECT BATCH.' || IMP_FIELDS_REC.SELECT_FUNC || '(''' || varUPDATE_TYPE || ''', ''' || IM_FIELDS_REC.COLUMN_NAME || ''', NULL,'''||  ''', ''' ||  IM_FIELDS_REC.IM_FIELD || ''') FROM DUAL'; --DOWNLOAd_func is called from here.
            
                BEGIN
               
                     EXECUTE IMMEDIATE  varFUNC_STATEMENT INTO varFUNC_RESULT ;
                END;
            END IF;
        END IF;
END LOOP;
END final;
This is the table structure and record values for FIELDs for DOWNLOAD_FUNC 

DAta setup in the Fields table for the Download_func
 
COLUMN_NAME   SELECT_FUNC     EXE_FUNC    IM_FIELD   TABLE_NAME 
OWN_SYS       DOWNLOAD_FUNC                22222      MINAL 

declare
  l_dynamic_func varchar2(100) := 'regexp_instr';
  l_source_str  varchar2(100) := 'Am I understanding SQL?';
  l_regexp_mask varchar2(100) := 'Sql';
  l_match_param varchar2(1) := 'i';
  varfunc_result integer;
begin
  EXECUTE IMMEDIATE 'SELECT '||l_dynamic_func||'( ''' || l_source_str || ''', ''' || l_regexp_mask || ''', 1, 1, 0, ''' || l_match_param || ''') FROM DUAL'
    INTO varfunc_result;
  --dbms_output.put_line( 'result: '||to_char(varfunc_result) );
end;

declare
  l_dynamic_func varchar2(100) := 'regexp_instr';
  l_source_str  varchar2(100) := 'Am I understanding SQL?';
  l_regexp_mask varchar2(100) := 'Sql';
  l_match_param varchar2(1) := 'i';
  varfunc_result integer;
begin
  EXECUTE IMMEDIATE 'begin :res := '||l_dynamic_func||'( :l_source_str, :l_regexp_mask, 1, 1, 0, :l_match_param ); end;'
    USING OUT varfunc_result, l_source_str, l_regexp_mask, l_match_param;
  --dbms_output.put_line( 'result: '||to_char(varfunc_result) );
end;