Question- RBI’s Auto Debit Rules Have Become Effective from which of the following date?
(a) From October 1, 2021
(b) From October 15 , 2021
(c) From October 10, 2021
(d) From October 2 , 2021
Ans. (a)
Related Facts-
- ON October 1, 2021, to bolster the safety and security of card transactions, the Reserve Bank of India (RBI) mandated new auto-debit rules.
- RBI’s directive states that there will be no automatic recurring payment for various services including utility bills, recharge of phone, DTH, and OTT, among others as the additional factor of authentication (AFA) will become mandatory from October 1, 2021.
- Under the new norms, banks will be required to inform customers in advance about recurring payments due and transactions would be carried the following nod from the customer.
- So the transactions would not be automatic but would be done after authentication from the customer.
- One-time registration process
- Customers will have to go through a one-time registration process, and subsequent transactions can be performed without the additional factor authentication.
- While registering, customers can now provide the validity period for future transactions.
- OTP for payments above Rs.5,000
- For recurring payments above Rs.5,000, banks are required to send a one-time password to customers as per the new guidelines.
- Choose to opt-out
- Customers can now even choose to opt out of a particular transaction or mandate via the link provided in the pre-debit notification.
- No impact on these auto-debits
- Any standing instructions registered using bank accounts for mutual funds, SIPs, equated monthly installments for loans will not be impacted by these new rules.
- RBI’s motive
- RBI had said the requirement of AFA has made digital payments in India safe and secure and the primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience.
By- Yogesh Pratap Singh
Reference- https://www.livemint.com/.