Auto-debits From Bank A/C Now Allowed For Home Loans, Mutual Funds; Is This A Boost For Digital India?
There are countless things for which a monthly payment is necessary, from home loans and car loans to mutual fund investments. For those who don’t find time to make all these payments every month, can now allow banks and fintech firms to do it for them.
Yes, the Reserve Bank of India has given its approval to the NPCI to implement the e-mandate guidelines by June 30.
Read on to know all the detail about the approval of the electronic mandates!
NPCI Granted Approval By The RBI
The National Payments Corporation of India (NPCI) has been granted the approval to implement the electronic mandate by the Reserve Bank of India (RBI). The final approval was received by the NPCI about 10 days ago. The approval letter allows the mandate to be implemented through debit cards and net banking.
The letter says, “We are pleased to inform that on April 15, 2019, we have received final approval from RBI for full-fledged implementation of e-mandates.”
This new development will help banks and fintech firms to auto debit payments that are recurring, such as home loans, insurance payments, mutual fund investments, and even utility bills. Customers will also have a lot less trouble looking after the payments and the whole process will be hassle-free.
There is a limit of Rs. 1 lakh set for each mandate, which will be dependent on the overall usage. The concerned organization will also examine and review the limit.
Banks Given Deadline For E-Mandate
All the banks have been given the deadline of 30th June 2019, to get on board with the electronic mandate. The letter also says, “All the member banks are advised to take immediate measures to implement both the measures not later than June 30, 2019.”
Seven banks have already incorporated the electronic mandate into their net banking services by the NPCI. These banks are Yes Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Central Bank of India, Bank of Baroda and Punjab National Bank. Kotak Mahindra Bank is the first one to implement the electronic mandate for both the net banking and debit card as well.
Previously, an Aadhaar based authentication was mandatory, and in December 2018, the Supreme Court had put a stop on it. This led NPCI to urge banks to start employing the e-mandate system as an alternative. This process was called the National Automated Clearing House (NACH).
This is an excellent step towards the nation’s goal of being a Digital India.
Do you agree? Share your thoughts with us right here in the comments section!