Starting April 1, customers will have to make alternative arrangements for recurring transactions for utilities and bill payments such as registering the biller on internet or mobile banking.

This is because most banks and payment companies have been unable to meet RBI norms to process e-mandate on cards for recurring transactions.

However, UPI and Rupay AutoPay facilities are unlikely to be disrupted. Sources said that most banks are live on it but it is unclear as to how many merchants are live on it.

Most large banks and payment players have already been informing customers that they would have to make alternative arrangements for auto debit through debit and credit cards.

Apart from payments for utilities like phone and electricity bills, even recurring payments to service providers such as Amazon Prime and Netflix will have to be made directly.

According to bankers, while they have made arrangements to comply with RBI norms, many merchants are yet to adhere to them.

“We are currently building a solution in adherence to the regulatory requirements. Therefore, effective April 1, 2021 any standing instruction for recurring transactions on your Card account will not be approved by American Express,” American Express said in a communication to customers, adding that to avoid any disruption in delivery of goods and services, starting April 1, 2021 customers should make payments directly to the service providers for bills as and when they become due.

Visa declined to comment on the issue when approached by BusinessLine.

“..as per regulatory guidelines, recurring merchant transactions based on Standing Instructions on your ICICI Bank Cards will be disabled effective April 1, 2021. To continue making payments against your regular utility bills, kindly register your biller through iMobile Pay or Internet Banking. For other standing instruction transactions, you may re-register or initiate transactions at regular intervals,” ICICI Bank said in a similar message to customers.

Recently, the Internet And Mobile Association of India (IAMAI) had also warned that millions of e-mandates set up by customers could fail from April 1, 2021.

The RBI had issued two circulars (August 2019 and December 2021) to banks, ‘non-bank prepaid payment instrument issuers’, and ‘authorised card payment networks’ for processing of e-mandates. The deadline to comply with it is March 31, 2021.

Under the new norms, banks will be required to inform customers in advance about recurring payment due and it would be carried following nod from the customer. For recurring payments above ₹5,000, banks are required to send a one-time password to the customer as per the new guidelines.

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