Money

RBI order: Timeline for processing of recurring online transactions extended to prevent inconvenience to customers

RBI representational Image: Reuters

The Reserve Bank of India has extended the timeline for the processing of recurring online transactions. The RBI had issued a framework for processing of e-mandates on recurring online transactions in August 2019. This was initially relevant to playing cards and wallets however later extended to cover Unified Payments Interface (UPI) transactions as nicely in January 2020.

The RBI in the present day (March 31, 2021) mentioned in an announcement that the requirement of Additional Factor of Authentication (AFA) has made digital funds in India secure and safe.

“In the interest of customer convenience and safety in use of recurring online payments, the framework mandated use of AFA during registration and first transaction (with relaxation for subsequent transactions up to a limit of ₹2,000, since enhanced to ₹5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc,” the RBI mentioned.

“The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience,” it added.

The central financial institution mentioned that based mostly on a request from Indian Banks’ Association (IBA) for an extension of time until March 31, 2021, to allow the banks to full the migration, Reserve Bank had suggested the stakeholders in December 2020 to migrate to the framework by March 31, 2021. “Thus, adequate time was given to the stakeholders to comply with the framework.”

However, the RBI has famous that the framework has not been totally carried out even after the extended timeline.

“This non-compliance is noted with serious concern and will be dealt with separately. The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021. Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action,” RBI mentioned.

The RBI has additionally issued a round advising the above.

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