RBI extends timeline for processing of recurring online transactions till Sept 30
The Reserve Bank of India (RBI) on Wednesday extended the timeline for the processing of recurring online transactions till September 30, 2021. However, it also reprimanded players that the non-compliance is a "serious concern".
RBI had directed all banks including RRBs, NBFCs, and payment gateways to comply with AFA for automatic recurring payment by March 31, 2021, in order to make digital transaction safe and protect customers from fraudulent transactions. However, some of the players failed to meet the deadline and approached the RBI seeking extension of the deadline.
"It is, however, noted that the framework has not been fully implemented 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," the RBI said in a statement.
To prevent any inconvenience to the customers, Reserve Bank of India has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021, it said.
"Any further delay in ensuring complete adherence to the framework beyond the extended timeline will attract stringent supervisory action," RBI cautioned.
In August 2019, the Reserve Bank of India (RBI) had issued a framework for processing of e-mandates on recurring online transactions. Initially applicable to cards and wallets, the framework was extended in January 2020 to cover Unified Payments Interface (UPI) transactions as well.
The statement said the requirement of AFA has made digital payments in India safe and secure.
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 Rs 2,000, since enhanced to Rs 5,000), as well as pre-transaction notification, facility to withdraw the mandate, etc, it said.
"The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience. Based on a request from Indian Banks' Association (IBA) for an extension of time till March 31, 2021, to enable the banks to complete the migration, Reserve Bank had advised 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," it said.
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