Automatic payment of electricity, water and phone bills, loan instalments, insurance premia and many other payments like Google, Zee-5, Netflix and other OTT platforms from your bank's debit or credit cards may stop from April 1 because of the tweaking of the Reserve Bank of India’s Electronic Clearing Service (ECS).
A circular issued by the RBI on August 21, 2019, prescribes additional authentication norms effective from April 1 for customers’ recurring payments that are directly debited to their bank accounts.
The ECS facility had ended the hassles of standing in queue for making payments in cash or by cheque; one also was no longer required to remember the last date of payment of so many services one avails of.
Many banks and service providers have not updated their systems to comply with the new rules and the RBI has refused to further extend the deadline on the ground that they had been already given more than 18 months to comply with.
The new rules mandate the banks and the service providers to inform the customer five days in advance before the payment is due and deduct it from his/her bank account only after he okays. The RBI sources said this provision will ensure that the customer has sufficient balance in his account for clearance of the payment.
Most of these payments are in hundreds, but if a recurring payment happens to be above Rs 5,000, an additional authentication contemplates the banks providing the one-time password to the customer.
If your bank or the service provider has not updated their system to comply with the RBI requirements, you will have to log into each of their web pages to make payments on the due dates.
