The City Headlines
Ludhiana, October 1
RBI has asked the banks to comply with the mandatory changes on auto-debits from October 1. There will be some changes in the way you pay your bills online.
The sources said that the banks had asked for some more time from RBI for the implementation of the rules. However, the RBI had refused to do so.
Here’s what you need to know about the rules.
First of all, you need to know what standing instructions are. It is a service offered by the bank to the customer wherein regular transactions that the customer wants to make are processed as a matter of course. The customer needs no initiation of specific transactions each time.
Generally, customers set home loans, personal loans, vehicle loan EMI, school fees, insurance premiums, subscriptions, for auto-debit.
From October 1, the standing instructions for auto-debit will require additional authentication.
Now, there will be no automatic recurring payments for services like recharge, utility bill and an Additional Factor of Authentication (AFA) will be mandatory.
The new rule applies to third-party merchants who have received standing instructions from customers to deduct periodic payments for different services. This means that the rule will apply to auto-payments from credit card, UPI, debit card, and e-wallets. Payments like mobile bills, DTH bills, OTT subscriptions etc. will be affected by these rules. The net banking transactions will remain unaffected.
For the payments above Rs. 5,000, the notification will be sent 24 hours before the due date, and only after authentication, the payment will be made.
This rule would not affect the repayment of the home loan or personal loan. Other than that, Mutual Funds SIPs would also not be affected. This is because there’s no third-party merchant when you make such payments.
It is advised to keep a check on the registered e-mail and messages on the registered mobile number. The notifications sent through the banks will carry the link to process the payment and that would help in authenticating the payment.
