The Buyt Desk
If you pay your utility bills, recharge your phone or OTT subscription through an auto-debit mode then you will have to look into it. From 1st October, the bank regulator Reserve Bank of India has mandated all the banks to not approve any recurring payment request given at any merchant website or any apps. Transactions above the limit of Rs 5000 will be processed manually through OTP. This is being done to enhance the security of your card payments. This rule is not applicable to payments made through net banking but both credit and debit card payments will be covered under this new rule.
Here are answers to some of the frequently asked questions –
What will change for debit/credit users?
From October 1, 2021, banks will clear the payment request only when the customer completes the approval procedure. The customer will have to give an e-mandate on cards for recurring payments.
Will there be no recurring payment facility available?
Card Users can go through a one-time registration process and register their recurring payments. This mandate can be given for future transactions as well. If you are sure that you will be making certain payments to a particular merchant or service provider for a certain number of months then you can register that particular biller for future transactions. Though banks and merchants will also provide a facility to view, modify, approve, pause, cancel standing instructions.
What happens when you have to make a recurring payment of more than Rs 5000?
If the recurring amount is less than Rs5000 then you will be able to make this payment automatically without Additional Factor Authorisation (AFA). But if the recurring payment is more than Rs 5000 then it will require your approval by a One-Time-Password. You will approve the transaction via Additional Factor Authorisation and then only will the amount be charged.
Bank’s Responsibility
Banks are mandated to send a notification 24 hours prior to the auto-debit of the payment. This will be a reminder to the customer that a recurring payment is coming up. It is also the bank’s responsibility to send a one-time password for every transaction of Rs 5000 and more.
Do I have to give monthly approval for my home loan EMIs?
No as the new rule will have no impact on loan EMIs and mutual fund SIP payments. These are standing instructions given by the consumer whenever these payments begin so this payment will continue as it is.
Can I opt-out?
Yes, the customer can choose to opt-out. This can be done by completing a pre-debit notification procedure with your bank.
