Through a combination of lobbying and non-compliance, the banking and payments industry has convinced the Reserve Bank of India (RBI) to extend the timeline for compliance with a set of new rules that impact recurring payments and card storage by merchants and payment aggregators. The RBI had introduced two new rules, it has now given industry additional time to comply with both guidelines: Framework for processing of e-mandates on recurring online transactions, August 2019: deadline extended from by six months to September 30, 2021 Guidelines on Regulation of Payment Aggregators and Payment Gateways, March 2020: deadline for some aspects extended by six months to December 31, 2021 Recurring payments deadline extended at IBA's request Under the August 2019 policy, the RBI mandated banks and payment companies to introduce a pre-transaction notification before auto-debiting a customers' account via their debit or credit cards, digital wallets or the Unified Payments Interface. It also mandated companies to issue a post-transaction notification for recurring transactions, an option to withdraw the e-mandate and set up a dispute or grievance redressal mechanism for the same. This policy was to be in force from March 31, 2021 onwards, but has been extended to September 31. All transactions below Rs 5,000 do not need Additional Additional Factor of Authentication, like one-time-passwords. The RBI introduced these changes to ensure that customers are made aware of every recurring automated tranasaction, before and after their accounts are debited. This was done to ensure greater protection for customers against fraudulent transactions. However,…
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