The Reserve Bank of India (RBI) on Wednesday extended the deadline for implementing the system for additional factor of authentication (AFA) for processing recurring online transactions until September 30. As a result of the extension, banks and financial institutions will have additional time to migrate to the new framework that the central bank originally announced in August 2019. Gadgets 360 learnt that merchants through various industry bodies urged RBI and the government to hold the proposed system as it was believed to disrupt auto-payments of mobile, utility, and other bills and subscription charges of over-the-top (OTT) platforms.
Citing the delay in the implementation of the new framework, RBI said in a press statement that it had decided to extend the deadline by six months.
“The delay in implementation by some stakeholders has given rise to a situation of possible large-scale customer inconvenience and default. To prevent any inconvenience to the customers, Reserve Bank has decided to extend the timeline for the stakeholders to migrate to the framework by six months, i.e., till September 30, 2021,” the central bank said in the statement.
It also warned that any further delay in ensuring complete adherence to the framework beyond the extended timeline would attract stringent supervisory action.
RBI initially issued the framework to deploy AFA for recurring transactions worth up to Rs. 2,000 in 2019. It, however, extended that rule in December last year to transactions of up to a limit of Rs. 5,000 per transaction and informed banks and other stakeholders that the migration to the framework would be required by March 31.
The implementation of the framework is projected to help bring more security to online transactions in the country. However, multiple industry sources confirmed to Gadgets 360 that major banks are yet to deploy the system to enable AFA for recurring transactions.
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