No more Penalty for Late pay of credit card bill

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            Auto debit rules for credit card bill payments in India. These rules were introduced by the Reserve Bank of India (RBI) to regulate recurring payment transactions made through credit cards, debit cards, and other prepaid instruments

Here are the key points you need to know:

  1. Additional Factor of Authentication (AFA):

    • For recurring payments to be debited automatically, customer approval is now required. This approval is obtained through an OTP sent to the cardholder 24 hours before the due date.
    • Transactions exceeding ₹15,000 always require cardholder approval.
    • For transactions below this threshold, the cardholder receives an alert, but AFA approval is not mandatory. The notification includes details like mandate ID, transaction value, purpose of debit, and date/time of debit.

  2. Options Available to Cardholders:

    • Cardholders can opt out of the transaction through AFA or view/modify/cancel the auto debit mandate.
    • They can also choose their preferred communication mode for alerts (text message, email, etc.).
    • If a cardholder doesn’t approve the transaction, the bank will decline it. In such cases, the customer must pay directly to the merchant through the app or website, bearing any non-payment or late payment fees charged by the merchant.

  3. Setting Up the E-Mandate:

    • Cardholders must set up an auto debit e-mandate authorizing the service provider or merchant.
    • Specify the validity period and the maximum auto debit amount for future transactions.
    • Two-factor authentication completes the registration process.

  4. International Recurring Transactions:

    • The new rules apply to overseas recurring transactions as well.
    • If a credit card or prepaid payment instrument doesn’t comply with the guidelines, auto debit instructions for such transactions will be discontinued.
    • To resume them, the cardholder must initiate the e-mandate with the issuing bank.