April 1, 2021, marks an important date for Indians and it's no joke or prank as RBI's new mandate goes into effect, forcing consumers' attention to their bills and more. Besides OTP disruption if banks refuse to pay heed to RBI's guidelines, another inconvenience is knocking on doors of consumers who pay their monthly bills through the popular auto-debit feature offered by banks in India.
The Reserve Bank of India had intimated banks, card networks, and online vendors to comply with new rules for two-factor authentication for customers' recurring payments through debit and credit cards. As per the new rule, banks and credit card service providers must notify customers five days prior to the payment and allow the payment only after the customer approves it. According to the ET report, payments above Rs 5,000 require OTP verification.
These rules go into effect on April 1, 2021. But what makes this bothersome for consumers is that major banks and vendors have said they are not ready for the change and even sought time from RBI on the implementation of its new pre-debit notification mandate. But RBI refused to comply.
Who is affected?
All major banks are going to be affected by this order, and by extension its customers. According to ET, HDFC Bank, ICICI Bank, Axis Bank, State Bank of India, leading card scheme operators American Express (Amex) and Mastercard have already started notifying customers and network partners that they won't be able to process standing instructions (SI) or recurring mandate-based payments.
This means your auto-debit option for utility bills, OTT subscription renewal and other automatic payments through debit and credit card won't go through. It is reported that transactions worth Rs 2,000 crore will be affected in April.
This adds inconvenience for consumers who are used to paying bills through the auto-debit feature. For the month of April, consumers are advised to make their monthly payments manually to avoid disruption of services or incur late-payment fees. It is worth noting that payments through alternative means such as NPCI platforms won't be affected.
