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Nov 3rd, 2021. October 5th 2021, I was expecting the message stating your instalment amount of INR XXX debited from my AXIS Bank Savings Bank account.  Unfortunately, no message, no transaction confirmation and its very surprising! Entire night I could not sleep. I started checking my bank account whether I have maintained balance in my account. Is my debit card expired? Is my bank changed my instalment date? Immediately I called my friend who is working in night shift with US process, he was also surprised and shocked, said oh no even my loan auto debit message not received. Finally, both of us decided to consult one of my friend Mr. Kiran Kumar who is a finance expert. He advised both of us not to worry about your instalments, but you could have registered for the mandate with you Bank or financial institution for auto debit from your credit card/debit card. Reserve Bank of India issued new guidelines effective from 1 October 2021, to make your debit and credit card transaction more secure. He suggested to check previous messages and email notification from your bank to process and told not to worry if you miss payment as banks will not report unless your payment missed more than 30 days.

Benefits of new policy:

  • To make your debit and credit card transaction more secure, reliable and avoid online fraud
  • To set the customer preferences or set transaction limit for the debit/credit card holders
  • To ensure the customers are aware of regular payment not missed out
  • To help customer to manage and govern their transaction and  maintain the good credit score

What is this new policy?

Every customer who have registered for auto debit on debit/credit card required to e-mandate reregistration effectively from 1st October 2021 irrespective of transaction amount for the first time. Any individuals paying monthly subscription services exceeding INR 5,000 on recurring basis required to fulfil 2-factor authentication. All your new debit/credit card issued by banks can be used only for domestic transactions with bank ATM’s and POS- Point of sales terminals. Individual given option to opt in or opt out of services card transactions and if your card will be disabled if you have never used online or contact less transaction in India or abroad.

How this new policy works?

Every card users register for first debit transaction with mandatory 2 factor authentication with your banks/financial institutions on your recurring transactions like payment of home loans, vehicle loans, insurance premiums, school fees, subscription fees for OTT and other monthly payments irrespective of amount. If the amount is below INR 5000 your bank will be sending notification, you need to approve or cancel or pause, if the amount exceeds INR 5000 you need 2-factor authentication with your consent and you will be notified 24 hours before debit. 2-factor authentication message contains Merchant name, mandate ID, amount, and date and card details for processing if the amount is less than INR 5000. If the amount is greater than INR 5000, you need to approve and consent using your online banking.

Impact of new policy on customers and Banks?

  • If reregistration by customer not completes your debit/credit card, UPI standing instruction will not be processed
  • Many users set auto payment from electricity , gas , OTT, monthly tuition fees etc. will be under chaos
  • Customers can opt for direct payment through merchant’s site every month manually.
  • Customer can use banking facility to set up auto payment from savings or current account
  • Set up auto pay using aggregators like Bill pay or Bill desk by registering cards.
  • If individual customers registered using bank account will not be affected, as it applies only to debit/credit/UPI transactions
  • Customers can opt out for unnecessary payment subscribed earlier oversight or without their knowledge.
  • Banks and financial institutions need to set up new system and upgrade infrastructure for smooth functioning of recurring payments.
  • Need to implement new standardisation and train the required employees on new policy.
  • Banks need to send every month notifications, communicate the customers and send debit notification 24 hours before payment.

Conclusion: Effective from 1st October recurring transaction using debit/ credit card required reregistering using 2-factor authentication in the beginning and subsequently if the amount exceeds INR 5000 required every transaction approval with 2-factor authentication. The new policy of Reserve bank of India is a great challenge for both customers and banks, as few banks/financial institutions need to set up new infrastructure for smooth operations.  The policy introduced by Reserve Bank of India is to make transaction more secure, reliable and avoid frauds. It facilities customer preferences to manage and govern their transaction to maintain the good credit history. The customers can use online mandate using their savings/current account, use merchant’s site for monthly payment, or opt for aggregators.  Initial days the customers, merchants and banks/financial institutions may face difficulty, but near future, many individuals are benefitted and help them in managing their finance effectively.


Chitra, R. (2021, 09 30). Times of India. Retrieved from (2020, 10 01). Retrieved from

THANAWALA, H. (2021, 10 01). Retrieved from (2021, 09 25). Retrieved from

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