RBI defers new rule on auto payments of bills by six months

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In a major relief to millions of consumers, the RBI has deferred till Sept 30, a new rule requiring additional authentication for auto payments made from individuals’ accounts for  mobile and other utility bills as well as subscription charges for over-the-top (OTT) platforms such as Netflix and  Amazon Prime</p>
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Under the new rule, which was earlier to be enforced from Thursday, recurring transactions would require additional authentication by the customer (at minimum, at the time of setting up a new recurring payment) to proceed. The current system for recurring transactions will now continue another six months.</p>
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Initially, the rule was planned on recurring transactions worth up to ₹ 2,000. The RBI, however, announced in December that on the basis of requests from stakeholders, the limit was raised to ₹ 5,000.</p>
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Transactions above that cut-off will require an additional one-time password (OTP).</p>
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RBI in August 2019 notified all scheduled commercial banks, card payment networks, prepaid instrument issuers, and the National Payments Corporation of India (NPCI) about the big change for recurring transactions.</p>
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The rule will apply not just on banks and financial institutions offering credit cards, debit cards, and other prepaid payment instruments, but also on mobile payment wallets and platforms enabling UPI-based payments.</p>