From April 1, 2021, your auto bill payments and subscriptions may report hurdles. As The Reserve Bank of India’s new ruling makes it mandatory for banks to seek customers’ permission. The approval is must before executing each transaction.
This new rule is about Additional Factor Authentication (AFA). But banks are being apprehensive as they are not yet ready to implement the new ruling.
Hence, many such debit and credit card transactions or payments can face hurdles in April. OTT platforms like Netflix and Amazon Prime, telecom service providers and power distribution companies also fall under this new rule’s ambit.
As a result, transactions worth Rs 2,000 crore, across sectors such as utility bills, OTT and others alike can get affected in April.
Furthermore, banks will send a one-time password (OTP) to customers for transactions above Rs 5,000.
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As per the Internet and Mobile Association of India (IAMAI), millions of customer e-mandates could fail from April 1. This could happen as most major banks have not taken the requisite steps to comply with the RBI requirements for e-mandates.
In the light of this new rule, banks like HDFC Bank, Axis Bank and the State Bank of India (SBI) have started notifying their partners. To process standing instructions or recurring mandate-based payments.
The central bank has also rejected the Indian Banks’ Association (IBA)’s request for extending the March 31 deadline.
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