As a non-resident Indian (NRI), if you have NRE/NRO accounts and also hold credit and debit cards in India, you must be aware of some new modifications to recurring payments introduced by the Reserve Bank of India (RBI).
The central bank has recently introduced an e-mandate for auto-debits linked to credit and debit cards.
Starting October 1, the RBI made it mandatory for all kinds of recurring or repetitive payments value of Rs 5,000 through credit and debit cards to be preceded by a notification from the bank, 24 hours in advance, informing the customer about the scheduled payment.
This rule has been enforced not only to Indian residents but also to NRIs if they make any recurring payments in India.
The advance notification sent by banks means that they seek the user’s approval to make the recurring payment. You, as a customer, have to provide additional factor authentication (AFA) and approve the auto-debit requesting in advance. The transaction would not complete if you do not approve or respond to the pre-debit notification.
Under the new regulations, you will receive one-time passwords (OTPs) if the recurring payment amount is Rs 5000 or above.
In other words, only those transactions which you will e-mandate will be successfully executed.
The top bank of India has introduced such a rule to provide additional protection to customers across India and outside from online frauds, specifically on third-party platforms. Besides, tending to provide customers greater control, RBI introduced the e-mandate rule so they can undertake recurring payments using credit or debit cards.
The rule is only applicable while making recurring payments through credit and debit cards and direct debits for equal monthly installments (EMIs) for loans and systematic investment plans (SIPs) payments are not likely to be affected.
Internet merchants such as Google, Facebook, and YouTube have already notified customers that the new rules may cause disruptions in e-mandate while making repetitive payments.
If you have not linked your banking services to your foreign mobile numbers, you will not be able to receive the respective messages or notifications from the bank. So, you need to keep a close watch on your upcoming recurring payments in India and make arrangements with your bank to make sure that you receive notifications on time to avoid disruption of services linked to such payments.
