The Reserve Bank of India on March 31 extended the timeline for processing recurring online transactions by six months, which will bring a big relief to many credit card and debit card users.
In August 2019, RBI had issued a framework for processing of 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 central bank framework initially mandated requirement of Additional Factor of Authentication (AFA) for any recurring online transactions above Rs 2,000 and later enhanced the limit to Rs 5,000.
This means if you have the auto-payment or recurring transactions for paying mobile, utility or monthly subscription charges for different OTT platforms such as Netflix, Amazon Prime above Rs 5,000, you will receive an One Time Password (OTP) from your bank to authenticate the transaction.
Based on a request from Indian Banks’ Association (IBA) for an extension of time 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.
However, it 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,” RBI said in a circular.
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, the central bank said.