Recurring transactions to continue as RBI extends deadline of new rule till September 30
New Delhi | Jagran Business Desk: In a relief for lakhs of customers, the Reserve Bank of India (RBI) on Wednesday extended the March 31 deadline on additional authentication on card payments for recurring transactions by six months till September 30, 2021.
"RBI extends the timeline for processing of recurring online transactions. To prevent any inconvenience to the customers, RBI has decided to extend the timeline for the stakeholders to migrate to the framework till September 30, 2021", the Reserve Bank of India said today.
In August 2019, the RBI had issued a framework for processing e-mandates on recurring online transactions. Initially applicable to cards and wallets, the framework was extended in January 2020 to cover Unified Payments Interface (UPI) transactions as well. The requirement of additional factor of authentication made digital payments in India safe and secure.
However, the RBI said the framework has not been fully implemented even after the extended timeline. This non-compliance is noted with serious concern and will be dealt with separately. The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default.
Under the new RBI rule, the customer will give a final go-ahead in all recurring transactions using cards and prepaid payment options for automatic payment of mobile and utility bills and payments for digital streaming subscriptions. A notification will be received by the customer before scheduled automatic payment. The payment will only be completed after the approval of the customer. All transactions above Rs 5,000 will require an additional OTP.
"The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience," the RBI had said in a statement, adding that stakeholders had been given enough time to comply.
The rule will apply not just to banks offering credit cards, debit cards, and other prepaid payment instruments, but also to mobile payment wallets and platforms enabling UPI-based payments.
(With ANI Inputs)
Posted By: Talibuddin Khan