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Economy
Pradeep Kumar

03/10/21 11:05 AM IST

New auto-debit rules from RBI

In news

To bolster the safety and security of card transactions, the Reserve Bank of India (RBI) mandated new auto-debit rules.

Objective

RBI had said the requirement of AFA has made digital payments in India safe and secure and the primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience.

New rule
  • RBI's directive states that there will be no automatic recurring payment for various services including utility bills, recharge of phone, DTH, and OTT, among others as the additional factor of authentication (AFA) will become mandatory.
  • Under the new norms, banks will be required to inform customers in advance about recurring payments due and transactions would be carried the following nod from the customer.
  • So the transactions would not be automatic but would be done after authentication from the customer. 
  • For recurring payments above Rs 5000, banks are required to send a one-time password (OTP) to customers.
Source: LiveMint

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