Imagine you sign up to an app or platform just to read one article or watch one movie.
You buy yourself an auto-renewing subscription by entering your card details and the OTP, and you make a mental note to cancel it before the next payment is due. But it slips your mind, and before you know it you have paid for the service a second time even though you barely used it.
The RBI's new rules seek to safeguard consumers from this loophole. Banks would be required to send a pre-transaction notification (by SMS/email) to the cardholder at least 24 hours prior to the auto-debit transaction. (Presently, amounts are automatically debited with the customer being intimated of the same post-debit.)
But late evening today, the Central Bank postponed the deadline to September 30th 2021.
Why were banks given six more months to transition to the new system? And what else do the new rules stipulate?