With effect from October 1, 2021, under the new additional factor authentication rules, a bank is required to send an intimation to the customer at least 24 hours before the auto-debit payment is deducted and debit is allowed only after the customer has gives. confirmed it. Pre-transaction notification will be sent through SMS, Email etc. The notification will inform the cardholder about the name of the merchant, transaction amount, date/time of debit, reference number/e-mandate of the transaction, reason for debit, ie. , e-mandate registered by the cardholder. The cardholder will have the facility to opt out of that particular transaction or e-mandate.
You must ensure that your correct mobile number is linked to your debit/credit card so that you can receive notification for approval
However, note that if you have a standing instruction to auto-debit from your bank account, the new rule will have no effect on your mutual fund SIPs, insurance premiums and other recurring payments.
What type of payments will this affect?
This new rule will affect users who have given auto-debit mandate for payment from their debit/credit cards and/or mobile wallets, subscription to OTT platforms like Netflix, Amazon Prime, music apps like Spotify, Apple Music among others. Payment of mobile bills, insurance premiums, utility bills etc.
Keep in mind that recurring transactions will require additional factor authentication and not ‘one-time’ payments. NS standing instructions Must be for payment by your Debit/Credit card. For example, till now Netflix asks you to provide your debit/credit card details for which subscription fee is debited on 8th of every month.
As mentioned above, additional factor authentication is not applicable for auto-debit transactions below Rs 5,000. Any recurring payment above Rs.5,000 will require the customer’s approval before the charges are charged to his/her Debit Card/Wallet and debited from the Bank Account/Wallet.
Extended deadline for banks
The additional factor authentication for the above payments was to come into effect from April 1, 2021. However, since several large banks such as HDFC Bank, ICICI Bank, State Bank of India (SBI) did not comply with the norm, the RBI extended the date by six months. Thus, the new rule will now come into effect from October 1, 2021.
The Central Bank, in its circular dated March 31, 2021, said that any further delay in ensuring full adherence to the framework beyond the extended time frame will result in strict monitoring action.