1. Personal
  2. TnC - RBI guidelines on recurring payments

FAQs- Important update regarding recurring merchant payments on your IndusInd Bank Credit/Debit Card

To safeguard customers, the Reserve bank of India (RBI) has put in place new safety and security measures for card payments. It directly impacts recurring payments (such as monthly/quarterly/annual bill payments) via auto pay mode to merchants and service providers for the services availed by you.

1. What is a recurring Standing Instruction(s)/e-mandate?
Recurring Standing Instruction(s) or mandate is a recurring payment facility offered on Credit/debit Cards for payments across various Merchants/Products/Service Providers such as OTT subscriptions (such as Netflix, Amazon Prime, etc.), Mutual Funds and SIPs, Insurance payments, Utility Bill payments, etc.

2. What is changing?
Effective 1 October 2021, Recurring Standing Instruction(s) maintained with the Merchants can be authorized/approved by Bank only if the respective Merchant/Product/Service Provider has initiated the transaction request as per the new standards laid down by the RBI. If we do not receive the transactions in the required format, we will be constrained to decline these recurring payments set up for your Standing Instruction(s), to comply with the regulatory guidelines.

3. Why is IndusInd Bank making this change?
As per RBI circular1 for ‘Processing of e-mandate on cards for recurring transactions’, Banks are advised to take customer authentications for all domestic/international transactions greater than INR 5000 and notify customers for mandate setup, modification, cancellation or transaction authorization etc. Pursuant to this regulation, there may be transactions from merchants that would require authentication via OTP in case transaction amount exceeds INR 5000. This regulation is applicable to domestic/international recurring transactions maintained with the merchant directly by customers.
Recurring Bill Payment transactions which are initiated through Bank’s digital channels (IndusNet/IndusMobile) does not fall under the purview of this regulation.
1RBI/2020-21/74 DPSS.CO.PD No.754/02.14.003/2020-21 & RBI/2019-20/47 DPSS.CO. PD. No.447/02.14.003/2019 – 20

4. What are the detailed regulatory guidelines that need to be followed from 1 October 2021?
Effective 1 October 2021, below guidelines will be implemented:
a. Additional Factor of Authentication (AFA) to be performed for the following:

  • E-mandate Registration
  • First transaction debit
  • Recurring transaction - if amount is greater than INR 5000
  • If recurring transaction amount is less than INR 5000 but greater than the “e-mandate Limit amount” that was set at merchant by customer
  • Modification of e-mandate
  • Deletion of e-mandate

Note: AFA can be clubbed if registration and first transaction are done together
b. Pre-transaction notification to customers:

  • Pre-transaction notification must be sent to customers for every e-mandate at least 24 hours before actual debit
  • This notification must give the customer an “opt out” option
  • In case the transaction amount is greater than INR 5000, then customer must approve this transaction through AFA. In case customer doesn’t approve the transaction, Bank will decline the same

c. Interface to be provided to cardholders to manage e-mandates; i.e. to approve/modify/delete e-mandates
d. The above guidelines apply to both domestic & International recurring transaction spends
e. Processing of recurring transactions not compliant with regulatory guidelines shall not be allowed beyond 30 September 2021

5. Why are the recurring transactions on my Standing Instruction(s) via credit/debit card not processed and declined?
(1st October 2021 onwards)As stated above, Bank has made the changes specified in RBI guidelines and it seems that your Merchant has not yet made the changes specified in the regulation and hence these transactions are declined.

6. Why are the recurring transactions less than INR 5000 for my Standing Instruction(s) also getting declined as they do not require an AFA? (1st October 2021 onwards)Recurring transactions for amount less than INR 5000 are getting declined because the Merchant has not made the specified changes at their end and is not sending the transaction in format specified by the regulator.

7. Whom do I contact if recurring transactions for the Standing Instruction(s) on my credit/debit Card is declined?
You will have to contact the Merchant/Product/Service Provider with whom you have set up the Standing Instruction(s).

8. What will happen to my international recurring transactions?
As per RBI regulations, International Merchants/Product/Service Provider are also required to follow the same guidelines. If the International Merchant/Product/Service Provider is not adhering to these guidelines and not sending the recurring transactions in the specified format, then it will be declined, irrespective of the amount.

9. What will happen to my e-mandate/SI transactions if I have disabled online transactions on my Credit Card/Debit card?
If the Merchant/Product/Service Provider is sending the transaction details as per the regulations, then e-mandates/SIs will be processed even if online transactions are disabled.

10. What if the Merchant/Product/Service Provider is not complying and I have upcoming recurring payments to be made?
Please contact your Merchant/Product/Service Provider and make alternative arrangements for payments like making one-time payment through your IndusInd Bank Credit/Debit Card or setting up payments through the Bank’s Bill Payment functionality on IndusNet/IndusMobile to ensure continuity of service and avoid any defaults.

11. What will happen to my existing Standing Instruction(s)/e-mandates?
As per the RBI regulation, this change is applicable to all recurring transactions - new or old. If your Merchant/Product/Service Provider is unable to send the transaction details as per the required format, it will be declined by the Bank.
Although, we have asked our service provider to migrate your existing SI mandates to the new RBI compliant system, this can only be done if the particular merchant/payment aggregator has configured their details in this system. Due to this dependency, it may take upto 4 weeks to migrate your existing SI mandates.
Alternatively, if your existing SI mandate is not migrated, you can check with the Merchant/Product/Service Provider to cancel and register your Standing Instruction(s)/mandate again as and when they become compliant with the regulations.

12. Which Merchants are complying with the RBI requirement?
You may check with your Merchant/Product/ Service Providers if they are complying with the new RBI guidelines and will be able to support recurring transactions in the specified format going forward.  
As of 14th October, we have following merchants live:

  • Netflix 
  • Amazon Prime 
  • Google India 
  • Hotstar 
  • Policy Bazaar 
  • Vodafone 
  • Max Life Insurnace 
  • HDFC ERGO General Insurance 
  • Bajaj Allianz General Insurance

13. Do we have any alternate options for such recurring payments?
You may explore The Bill Payment option on our Digital Channels (IndusNet/IndusMobile). Please note that this is only available for domestic merchants who are on boarded on our Bill Payment platform.
You can also visit the Merchant Website/App to directly make payments using your IndusInd Bank Credit/Debit Card as per your billing frequency via OTP authentication.

14. I have few utility payments registered for recurring transactions on Bank’s Bill Payment system. Will that get declined too?
This regulation is applicable to Domestic/International recurring transactions maintained with the Merchant/Product/ Service Provider directly by the customer. If your utility payment Standing Instruction(s) registration was done using the Bank’s Bill Payment option on digital channels, then there will be no impact to your utility bill payment due to this change.

15. My Merchant/Product/ Service Provider says they have adhered to the new format, and Bank is still declining the transactions despite them being represented correctly?
Bank will not decline any transactions if Merchant/Product/Service Providers are adhering to and sending the transactions as per the RBI guidelines.

16. Is this change only limited to new Standing Instruction(s)/recurring transactions set up or for Old Standing Instruction(s)/ recurring set up as well?
As per RBI regulations, this change will be applicable to all recurring transactions - new or old. Therefore, you are advised to register new Standing Instruction(s) for continuity of payments.
You may also want to cancel your existing mandates with your Merchants/Product/Service Providers if not migrated, to avoid any duplication in case a new mandate is registered.

17. Is it only IndusInd Bank or other Banks are also impacted because of revised guidelines?
The revised guidelines are applicable to all Banks and you might have received similar communication from other Banks as well. Please reach out to them for any further clarifications.

18. What will happen if my subsequent transaction amount is more than the mandate amount but less than the RBI limit of INR 5000?
You will receive a pre-transaction notification for such transactions and for processing the same, successful OTP authentication (AFA) would be required.

19. Will the customers have to pay charges if the recurring transaction gets declined due to non-compliant process?
In the event of merchant/service provider levying any charges/fees towards non- payment/delayed payment, Bank will not be responsible for the same.
Please get in touch with your Merchant/Service Provider directly for the same.

20. I have received a Pre-transaction notification for e-mandate set at merchant. Where can I go and approve or opt out of transaction?
Please click on the link provided in the pre-transaction notification to approve/modify/cancel your SI transaction.

21. What can I modify in an e-mandate?
You can modify the transaction amount, frequency of debit, or cancel the e-mandate.

22. I have set an e-mandate at merchant platform as per compliant process, but my Credit/Debit Card number has changed. Will the new card number get updated against my e-mandate at merchant end automatically?
No, we request you to visit the merchant platform and enter your new Credit/Debit Card Number for future recurring payments.