AUTO-DEBIT RULE TWEAK DEADLINE PUSHED TO SEPT
MUMBAI: The Reserve Bank of India (RBI) on Wednesday extended the timeline by six months to comply with its guidelines related to recurring online transactions with Additional Factor of Authentication (AFA), but reprimanded players that the non-compliance is a “serious concern”.
RBI had directed all banks including RRBs, NBFCs, and payment gateways to comply with AFA for automatic recurring payment by March 31, 2021, in order to make digital transaction safe and protect customers from fraudulent transactions.
“It is, however, noted that the framework has not been fully implemented even after the extended timeline,” RBI said.
MUMBAI: The Reserve Bank of India (RBI) on Wednesday extended the timeline by six months to comply with its guidelines related to recurring online transactions with Additional Factor of Authentication (AFA), but reprimanded players that the non-compliance is a “serious concern”.
The RBI had directed all banks including RRBs, NBFCs, and payment gateways to comply with AFA for automatic recurring payment by March 31, 2021, in order to make digital transaction safe and protect customers from fraudulent transactions.
However, some of the players failed to meet the deadline and approached the RBI seeking extension of the deadline.
“It is, however, noted that the framework has not been fully implemented even after the extended timeline. This noncompliance 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,” the RBI said in a statement.
To prevent any inconvenience to the customers, the RBI has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021, it said.
“Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action,” RBI cautioned.
In August 2019, the 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 statement said the requirement of AFA has made digital payments in India safe and secure.
In the interest of customer convenience and safety in use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc, it said.
Commenting on the decision of the RBI, Anshuman Verma, director at Bridge Inventions, said this is a welcome step by the central bank and industry players have got the final grace period.
Industry will ensure compliance of the RBI directive in the interest of safe and secure digital transactions, he added.