The Reserve Bank of India today extended the timeline by six months to comply with its guidelines related to recurring online transactions with Additional Factor of Authentication (AFA). The framework mandated the 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. RBI had earlier 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 the digital transactions safe and protect customers from fraudulent transactions.
“It is, however, noted that the progress of onboarding existing as well as new mandates of customers as per the framework is not satisfactory. Keeping in view the requests of some stakeholders and to prevent any inconvenience to customers, it has been decided, as a one-time measure, to extend the timeline for ensuring full compliance to the framework till September 30, 2021. During the extended timeline, no new mandate for recurring online transactions shall be registered by stakeholders, unless such mandates are compliant with the framework” the RBI circular said.
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. In December 2020, the framework for processing of e-mandates for recurring online transactions using cards / wallets / Unified Payments Interface was put in place.
However, the Central Bank was not happy with the players for inordinate delay in compliance with the framework. “This non-compliance is noted with serious concern and any further delay will be dealt with with stringent supervisory action”, it warned.