New RBI Rule: Confusion Over Auto Debit Payment System Adding To Customers' Woes, Know More

The Reserve Bank of India had issued a directive to banks to provide an extra layer of security to consumers which came into effect at the beginning of the month.

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New RBI Rule: A major change in the Auto Debit option came into effect on October 1. Due to this RBI rule, customers who have taken monthly subscriptions to services like Netflix, Amazon Prime, other OTT platforms or websites are facing issues as their subscription cannot be automatically renewed anymore.

Banks that have not changed their systems under the new rule on the Auto Debit system are said to be responsible for this problem being faced by customers.

Small businesses or startups that used to run on subscription models have been in trouble since the implementation of the new RBI rules regarding recurring payments, as they are continuously losing customers due to this rule. Some of the banks have reportedly not made appropriate changes, making it difficult for subscribers to make recurring payments.  

Difficulty in Netflix, Amazon Prime's subscription

Amazon has shut down its free Prime Subscription service in India for the time being after the Monthly Recurring Payment. Netflix is asking customers to reset their payment mode. Apple has advised its customers to top up their closed loop wallet Apple ID to ensure smooth payments. 

RBI's new rule on Auto Debit facility

A major change in Auto Debit or Recurring payment system came into effect on October 1. The Reserve Bank of India had issued a directive to banks to provide an extra layer of security to consumers which came into effect at the beginning of the month.

According to RBI rule, banks will now facilitate 'additional factor authentication' on auto debit payments to customers, i.e., now if you have taken a subscription to an over-the-top (OTT) platform or any other website, the automatic payment that takes place every month will no longer happen automatically. If more than Rs 5,000 is to be paid, your bank will have to take approval from you before making the payment. You will receive a notification in this regard 24 hours before the payment and money from your account will not be deducted unless you approve it.