The Reserve Bank of India (RBI) has mandated new auto-debit rules on October 1, 2021 in order to strengthen the safety and security of card transactions.

Key Points

As per RBI’s directive, there will be no automatic recurring payment for several services like utility bills, DTH, recharge of phone and OTT because additional factor of authentication (AFA) will become mandatory onwards.

Under new directives, banks will have to inform the customers in advance regarding the recurring payments due. Transactions will not be automatic but will be done after customer has authenticated it.

Customers are required to follow a one-time registration process. After this process, further transactions can be performed without any additional factor authentication. Customers can provide the validity period for future transactions, while registering for the process.

Under the new norms, banks are required to send a one-time password to the customers for recurring payments of more than Rs 5000.