RBI has made it mandatory to use some new security features for auto-debit facility in one’s bank account with effect from October 1, 2021. Know which rules will change from October 1.
New credit-debit card rule: Many rules related to banking and financial sector will change from October 1. Along with changing the check book of three banks, the rules related to credit, debit cards will also change. The Reserve Bank of India (RBI) has made it mandatory to use some new security features for auto-debit facility in one’s bank account with effect from October 1, 2021.
As per the new rules, those who use the auto-debit facility to pay recurring bills or Equated Monthly Installments (EMIs) from their bank accounts may have to manually do some auto-debit transactions from October 1. While many banks like Axis and HDFC had already alerted their customers about the possibility of failure of upcoming auto-debit transactions, some payment service providers are yet to comply with the new RBI norms.
For HDFC Bank customers,
HDFC Bank wrote on its website that “For the safety of the customers, the Reserve Bank of India (RBI) has introduced new security measures for card payments. Please Note: With effect from October 1, 2021, HDFC Bank will not approve any standing instruction (e-mandate for processing of recurring payments) on its Credit Card/Debit Card given on the Merchant Website/App, unless It should not be as per the compliance process of RBI.”
For Axis Bank customers,
Axis Bank said, “As per RBI’s Recurring Payment Guidelines wef 20-09-21, standing instruction will not be accepted on your Axis Bank card(s) for recurring transactions. You can pay for the uninterrupted service directly to the merchant using your card.”
What is e-mandate?
RBI’s new framework to process ‘e-mandate’, digital payment infrastructure for recurring online transactions by RBI and National Payment Corporation of India (NPCI) was launched in 2018 to be effective from March 2021 . The date was later pushed to October 1, 2021, as several stakeholders sought more time for implementation.
E-mandate is basically a set of standing instructions that allows banks and corporates to collect payments from customers virtually and without human intervention. It enables banks to process auto-debit requests for your EMIs, mutual fund SIPs, digital subscriptions, etc.
what’s new?
As per the new rules, for all auto-debit transactions below Rs 5,000 made through debit cards, credit cards, UPI and other prepaid payment instruments (PPIs), the central bank has introduced an additional factor of authentication (AFA). has done. Whereas, for auto-debit transactions above Rs 5,000, the transaction will have to be manually authenticated (authenticated) by the customer through a one-time password (OTP). Therefore, all stakeholders need to fully implement the framework by September 30, 2021.
Banks will send a pre-debit message or email to the customer at least 24 hours before the payment. This will act as an ‘alert message’ for the customer to review the upcoming expense and cancel if he so desires. The pre-transaction notification will inform the card holder about the merchant name, transaction amount, date, time of debit, reference number of the transaction, e-mandate, reason for debit.
Things to keep in mind
Customers should ensure that the correct mobile number is registered with the Debit/Credit card which will be used for approval of the notification. If the registered number is not active or unavailable, you may miss the notification and your auto-debit will be stuck. Notably, this framework will be applicable to all recurring payments.
