Leading private banks to cancel auto-debit payments from April 1

RBI to fine Rs 5 lakh per instance of lapse. Given that millions of bank customers use the auto-debit facility, banks were staring at hundreds of crores in fines

Faced with the prospects of attracting huge fines by the regulator, banks have started cancelling the service of e-mandates for auto-debit of funds from cards.

Leading private banks have started sending messages to their customers that they will have to transact on their own for services they want to avail, instead of banks deducting the fee automatically on their behalf.

For example, Axis Bank has sent a communication to its customers that said in accordance with regulatory requirements, “processing of e-mandates for recurring transactions,” registered on credit or debit card, “without Additional Factor of Authentication (AFA), will be discontinued w.e.f.