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Mumbai: If you have set up e-mandate instructions for auto-debit of payments such as EMIs for home loans or other recurring payments from your bank accounts, there is a chance you may have to do it manually. This is due to a new compliance directive issued by the Reserve Bank of India (RBI) for banks, other payments channels to strengthen security measures for card payments, which lenders are expected to meet by October 1.

According to RBI's new rules, banks can only process such transactions if they send a pre-debit message to customers at least 24 hours prior to the payment. Also, automated payments above Rs 5,000 will need to be authenticated by the customer manually via a one-time password (OTP).

Private lenders HDFC Bank, ICICI Bank and Axis Bank are working against the clock to meet the central bank directive on recurring payments by the deadline to prevent any hassle to their customers in this regard.

For instance, HDFC Bank notified its customers that "effective October 1, 2021, it will not approve any standing instruction (e-Mandate for processing of recurring payments) given at merchant website, app, on HDFC Bank credit or debit card, unless it is as per RBI complaint process".

It also said that such automated payments will only go through for stakeholders that have completed the development, integration and adoption of a common RBI-compliant industry-wide platform for same by the deadline.

"The new conditions prescribed by RBI require a cohesive effort by all stakeholders, including Card Issuing banks, Merchant Acquiring Banks, Card Networks and Merchants. All constituents must complete the development, integration and deployment of a common platform fully compliant with the RBI guidelines. A common industry-wide platform is being developed, and HDFC Bank has completed its internal development and integration. We are now working jointly with merchants to make this platform live for customers at the earliest".

According to reports, banks are working with payment aggregators such as Razorpay and BillDesk to integrate with the common e-mandate platform in order to be compliant with the RBI directive.

Axis Bank and ICICI Bank told Economic Times their systems will be compliant with the RBI mandate well ahead or by the October-1 deadline.

The central bank deferred its original March 2021 deadline after several banks expressed their inability to comply with RBI's instructions. It issued a circular that banks processing such instructions will face strict action if they do not comply with the new rule after September 2021.
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