RBI extends timeline for processing of recurring online transactions by 6 months

The RBI had extended the previous deadline of December 2020 to March 31 on the request of Indian Banks’ Association (IBA) to complete migration of the banks to the framework.

The Reserve Bank of India (RBI) on Wednesday announced the extension of timeline for processing of recurring online transactions. In 2019, the RBI had issued a framework for processing of e-mandates on recurring online transactions that made the use of Additional Factor of Authentication (AFA) compulsory for safety.

The framework which was initially applicable to cards and wallets was extended to Unified Payments Interface (UPI) transactions in January 2020. (Mint file photo)

However, the framework has not been fully implemented by the stakeholders even after the extension of deadline from December 2020 to March 31 and hence to prevent any inconvenience to customers, the central bank has extended the deadline by six months i.e. September 30 for the stakeholders to migrate to the framework.

“The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021,” RBI said in a statement.

Any further delay in compliance with the framework beyond the extended date will lead to stringent supervisory action, the central bank added.

The framework which was initially applicable to cards and wallets was extended to Unified Payments Interface (UPI) transactions in January 2020.

For customer safety and convenience, the framework mandated the use of AFA during registration and first transaction (with relaxation for further transactions upto a limit of ₹2,000, since enhanced to ₹5,000) including pre-transaction notification, facility to withdraw the mandate, etc.

The RBI had extended the previous deadline of December 2020 to March 31 on the request of Indian Banks’ Association (IBA) to complete migration of the banks to the framework.

“The primary objective of the framework was to protect customers from fraudulent transactions and enhance customer convenience. Based on a request from Indian Banks’ Association (IBA) for an extension of time till March 31, 2021, to enable the banks to complete the migration, Reserve Bank had advised the stakeholders in December 2020 to migrate to the framework by March 31, 2021,” the statement read.