The Reserve Bank of India (RBI) has mandated new auto-debit rules on October 1, 2021 in order to strengthen the safety and security of card transactions.
RBI’s new auto Debit Rules
As per RBI’s directive, there will be no automatic recurring payment for several services like utility bills, DTH, recharge of phone and OTT because additional factor of authentication (AFA) will become mandatory onwards.
Under new directives, banks will have to inform the customers in advance regarding the recurring payments due. Transactions will not be automatic but will be done after customer has authenticated it.
Under the new norms, banks are required to send a one-time password to the customers for recurring payments of more than Rs. 5000.RBI had made AFA mandatory with the objective of making digital payments in India safe and secure. It also seeks to protect customers from fraudulent transactions.
