NEW DELHI: The Reserve Bank of India (RBI) on Wednesday extended the deadline for processing recurring online transactions to September 30, 2021, from March 31, 2021.
Banks and payment gateways had sought additional time to comply with the RBI directive on automatic recurring payment.
“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. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action,” a notification from RBI stated.
On December 4 last year, the RBI had directed all banks including RRBs, NBFCs, and payment gateways that the processing of recurring transactions (domestic or cross-border) 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.
As part of risk mitigation measure, RBI announced this step to bolster safety and security of card transactions.
Later, RBI enhanced the limit for contactless card transactions and e-mandates for recurring transactions through cards (and UPI) from Rs 2,000 to Rs 5,000 from January 1, 2021 with a view to further the adoption of digital payments in a safe and secure manner.
Under the new norms, banks will be required to inform customers in advance about recurring payment due and transaction would be carried following nod from the customer. So the transaction would not be automatic but would be done after authentication from the customer.
For recurring payments above Rs 5,000, banks are required to send one-time password to customer as per the new guidelines.
(With inputs from PTI)