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RBI's new auto-debit rules October 01 2021RBI's new auto-debit rules, New payment rules by R

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RBI imposed a new rule for the auto-debiting feature

The Reserve Bank of India (RBI) imposed a new rule for the auto-debiting feature of banking transactions, which has been set to take effect on October 1, Friday, to ensure transaction security. According to the new RBI regulation, there would be no more automatic recurring payments for the numerous services associated with it, including as utility bills, phone recharges, DTH, and OTT payments. This is because, as of today, the apex bank's directive specifies that any transaction requiring an extra factor of authentication (AFA) must be approved first. This essentially indicates that no money can or will be debited from the bank account on the basis of an automated debit payment without the customer's agreement. The adoption of AFA, according to the RBI, is intended to offer additional layers of protection to any transactional activity. In this scenario, the central bank's principal goal is to protect bank customers from fraudulent transactions while also improving their ease.

To date, the deadline has been moved forward multiple times. The reason for this is because many big banks, including HDFC Bank, ICICI Banks, and the State Bank of India (SBI), failed to follow the given directive, forcing the RBI to extend the deadline by six months.

“The framework has not been properly implemented even despite the extended timeline,” the RBI stated in a circular. Noncompliance is handled seriously, and it will be dealt with separately. Because some stakeholders have been slow to adopt, there is a risk of widespread customer inconvenience and default. To minimize client inconvenience, the Reserve Bank has decided to extend the deadline for stakeholders to migrate to the framework by six months, until September 30, 2021.”

Besides that, here are five things you should know about this new rule as we move into October.

1) Advance Alerts

According to the new RBI regulation, your particular bank with which you have transactional accounts will have to send you information or an alert 24 hours in advance regarding recurring payment dues. It is sent ahead of time to give the customer time to accept and verify the payment, as the bank will not complete the transaction without the account holder's consent. This extra layer of protection ensures that the customer is aware of every transaction that involves money moving out of their accounts.

2) One-time Registration

While this may appear to be a time-consuming procedure, it is not. Customers will only have to go through the registration process once under the new regulation, and only the first transaction will require the additional element of authentication. Customers can execute further transactions without the AFA after the first transaction. Customers can, in fact, specify the validity period for future transactions upon registering.

3) Payments exceeding more than Rs 5,000 by OTP

If the recurring payment exceeds Rs 5,000, the bank in issue is required by RBI mandate to email the consumer a one-time password (OTP) before the transaction may be executed.

4) Its a Personal Choice

Customers of any bank can opt out of the mandate or any individual transaction at any moment for the sake of convenience. This can be done by using the pre-debit notification, which includes a link to a portal where you can complete the process step-by-step. Keep in mind that this mandate was put in place to protect your bank account and the cash within it.

5) Auto-Debits are not impacted.

These new restrictions and adjustments will not affect any standing instructions that were registered for using existing bank accounts for mutual funds, SIPs, or equivalent monthly installments for loans.

Also Read - Why is SBI share price falling?

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

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