No Deduction Without Notification! Learn About the RBI’s New Rule Against Arbitrary Bank Practices—Get an Alert 24 Hours in Advanc

RBI Rule Change: The RBI has revised the rules regarding auto-debit transactions. Now, you will receive a 24-hour advance alert before any payment is processed. Let’s take a closer look at this new change.

RBI e-Mandate Rules for Auto-Debit: If money is ever deducted from your bank account without your knowledge, this news will be of great use to you. To alleviate concerns regarding unauthorized deductions from bank accounts, the Reserve Bank of India (RBI) has implemented new rules pertaining to e-mandates.

Following these changes, the auto-debit system has become significantly more secure than before. This new update will benefit individuals whose accounts are subject to automatic monthly deductions for EMIs, subscriptions, or utility bills. Let’s explore the details of this new development.

Essential Alert to be Received Before Deduction

1. The most significant change introduced by the new rules is that customers must now be notified prior to any auto-payment transaction.
2. Banks or the respective service providers are now required to send an alert at least 24 hours in advance.
3. This alert will include the name of the company, the amount to be deducted, the date, and other essential details. This ensures that the customer is informed beforehand about exactly when and how much money is scheduled to be deducted from their account. If anything appears incorrect or unauthorized, the customer can intervene and stop the transaction in time.

Approval Required Before Auto-Payment

1. According to the new regulations, customers must now complete a one-time registration process before activating any auto-payment facility.
2. An additional layer of verification has also been made mandatory for customers. This means that no auto-debit facility can be activated without the explicit consent of the customer, thereby significantly enhancing the security of the bank account.

Which Services Will the New Rules Apply To?

These new auto-payment regulations will apply to services such as OTT subscriptions, insurance premiums, utility bills (electricity and water), and EMIs. Additionally, auto-debit transactions processed via cards, UPI, or prepaid instruments will also fall under the purview of these new rules. New Rules Will Not Apply to These Services

In certain cases, the new rules will not be applicable. For instance, these regulations will not apply to the auto-recharge of FASTag and the National Common Mobility Card. In other words, the existing system for these services will continue unchanged.