Standing instructions for recurring transactions on cards to get impacted from April 1- Here is what to do

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March 31, 2021 1:15 PM

If you have given any standing instructions on your debit cards or credit cards for recurring transactions, they may get impacted from April 1.

Standing instructions, E-MANDATE, RBI new rule, debit cards, credit cards, recurring transactions, SIP MF,Most banks are intimating their customers by sending them a communication on the new rules.

The processing of recurring transactions, whether domestic or cross-border, using cards or pre-paid instruments or UPI may get impacted beyond March 31, 2021. So, if you have given any standing instructions on your debit cards or credit cards for recurring transactions, they may get impacted from April 1. Most banks are intimating their customers by sending them a communication on the new rules.

The Reserve Bank of India (RBI) has, over the past decade, put in place various safety and security measures for card payments, including the requirement of Additional Factor of Authentication (AFA), especially for ‘card-not-present transactions. Recurring transactions based on standing instructions given to the merchants by the cardholders were brought within the ambit of AFA in 2011.

Subsequently, the RBI decided to permit processing of e-mandate on cards for recurring transactions (merchant payments) with AFA during e-mandate registration, modification and revocation, as also for the first transaction, and simple and automatic subsequent successive transactions. This was applicable for transactions performed using all types of cards – debit, credit and Prepaid Payment Instruments (PPIs), including wallets. The maximum permissible limit for a transaction under this arrangement was Rs 2,000 which was later increased to Rs 5,000 effective January 1, 2020.

In case, the payment does not go through in spite of giving standing instruction to your banker to debit your card/account, you will have to visit the merchant website and make the payment on your own. Its time to re-visit your list including utility bills, OTT subscriptions or even your grocery items and make sure you pay on time to avoid any penalty charges.

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