On March 31, 2021 the Reserve Bank of India announced to extend the timeline for processing of recurring online transactions till September 30, 2021.
- However, the RBI clarified that any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action.
- It means, for auto-payments from debit and credit cards or via wallets, an additional authentication will be required by the customer from October 1, 2021.
- Under the new norms, banks will be required to inform customers in advance about recurring payment (automatic payment) due and transaction would be carried following nod from the customer.
- The limit for auto-debit from cards and wallets is set at Rs. 5,000. For transactions above the cut-off, an additional one-time password (OTP) will be needed.
- The new rule will be applicable for transactions performed using all types of cards – debit, credit, UPI and PPIs, including wallets, the central bank earlier mentioned.
- On December 4, 2020 RBI had directed all banks and payment gateways that the processing of recurring transactions using cards or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) under arrangements/practices not compliant with AFA would not be continued beyond March 31, 2021.
