The development has happened at a time when India’s payment The ecosystem, online merchants and consumers are anticipating massive disruption in recurring payments through debit and credit cards due to new central bank regulations.
According to sources, these banks are working with payment aggregators RazorPay and BillDesk to integrate them with a common e-mandate platform that will ensure compliance. New rules by the Reserve Bank of India (RBI) state that banks can process auto-debit transactions only if they send pre-debit information to customers at least 24 hours before payment. “‘We will go live in the next 2-3 days by complying with reserve Bank of India Guidelines,” said Sanjeev Moghe, EVP and Head – Cards and Payments, Axis Bank. An ICICI Bank spokesperson said the bank will go live with a compliance system from October 1. HDFC Bank did not respond, but customer As per the communication reviewed by ET, the lender is also working towards compliance.
“A common industry-wide platform has been developed, and HDFC Bank has completed its internal development and integration,” said HDFC Bank’s communication. “We are now working jointly with merchants to get this live for customers as quickly as possible.”
Earlier this year, several banks expressed their inability to comply with the rule. The central bank has already deferred the implementation of this rule in strong words in March 2021, stating that non-compliant banks that process such transactions after September 2021 will face strict regulatory action. Will have.
The new rule also states that auto-transactions above ₹5,000 will require a separate flow which will require customers to manually authenticate such payments with a One Time Password (OTP) . In fact, some of India’s biggest internet merchants – Google, Facebook, YouTube – have informed customers over the past few days that the new rules could lead to massive disruption to e-mandate-based recurring payments. Others potentially affected would include financial service providers, OTT platforms, telecom operators and news media.
It could not be immediately determined whether other large market lenders, including State Bank of India, would ensure compliance. SBI and RBI also did not respond.
However, despite these claims of banks, industry sources have expressed apprehension about the timeline. According to an executive, many large banks may miss deadlines due to procedural delays and procurement issues.