Auto-debit facility for your recurring transactions to stay till September 30
As per the new norms, banks will be required to inform customers in advance about recurring payment which is due and transaction would be carried out after obtaining customer’s approval
The Reserve Bank of India on Wednesday deferred the implementation of new rules for auto-payment by another 6 months till 30 September.
The additional factor authentication (AFA) framework for recurring transactions via debit cards, credit cards or other prepaid instruments was scheduled to come into effect from 1 April. As per the new norms, banks will be required to inform customers in advance about recurring payment which is due and transaction would be carried out after obtaining customer’s approval. However, considering the delay in implementation by certain stakeholders the central bank extended the deadline.
“The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience. Based on a request from Indian Banks’ Association (IBA) for an extension of time till March 31, 2021, to enable the banks to complete the migration, Reserve Bank had advised the stakeholders in December 2020 to migrate to the framework by March 31, 2021. Thus, adequate time was given to the stakeholders to comply with the framework,”RBI said in a statement.
“It is, however, noted that 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. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action,” it added.