The Reserve Bank of India (RBI) has introduced pre-transaction notification facility for recurring online transactions that would give customers better control over transactions that occurs on a regular basis.
The RBI has directed customers to make use of this new auto-debit facility to pay recurring bills or EMIs from their bank from October 1.
All banks including RRBs, NBFCs, and payment gateways that process of recurring transactions have been asked to implement the mandated changes in the auto debit rules.
Under the new system, Banks will alert customers at least 24 hours before they can go ahead with processing the money transfer slated on a specific date. It will be sent to users' registered phone number and email ID. Details such as name of the merchant, reference number of transaction, e-mandate, transaction amount, date, time of debit, the reason for debit etc will be part of this pre-debit message. On receipt of this notification, the customer has to approve the automated payment above Rs 5,000 by using a one-time password (OTP). The customer can modify or cancel the payment. The bank can go ahead with transaction if the customer takes no action before the deadline.
It is applicable to remit recurrent bills such as EMIs, vehicle loans, utility bills, home mortgage, property loans etc on the payment due date from your bank account.
The auto-debit facility for cardholders for purchasing goods or services provided over a period of time has to abide by the new RBI guidelines. Payments without the OTP approval of the customer can be done only for instalments up to Rs 5,000.
