RBI representational Image: Reuters
The Reserve Bank of India has extended the timeline for the processing of recurring online transactions. The RBI had issued a framework for processing of e-mandates on recurring online transactions in August 2019. This was initially applicable to cards and wallets but later extended to cover Unified Payments Interface (UPI) transactions as well in January 2020.
The RBI today (March 31, 2021) said in a statement that the requirement of Additional Factor of Authentication (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,” the RBI said.
“The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience,” it added.
The central bank said that based on a request from Indian Banks’ Association (IBA) for an extension of time till March 31, 2021, to enable the banks to complete the migration, Reserve Bank had advised the stakeholders in December 2020 to migrate to the framework by March 31, 2021. “Thus, adequate time was given to the stakeholders to comply with the framework.”
However, the RBI has noted that the framework has not been fully implemented even after the extended timeline.
“This non-compliance 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. 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, i.e., till September 30, 2021. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action,” RBI said.
The RBI has also issued a circular advising the above.
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