Consumers can now mandate banks and fintech firms to make recurring payments for a wide range of services like payments to insurance companies, home loans and mutual funds investment.
The Reserve Bank of India (RBI) has given a green signal for full-fledged implementation electronic mandate to National Payments Corporation of India (NPCI). The central bank, in a letter, has asked to implement both the e-mandate measures by June 30.
NPCI, which received the final approval ten days ago, has already allowed seven banks to offer net banking based e-mandate.
The banks gone live included Yes Bank, Kotak Mahindra Bank, Axis Bank and IndusInd Bank, Central Bank of India, Bank of Baroda and Punjab National Bank. Kotak Mahindra Bank has gone live for both net banking and debit card-based mandates, as per NPCI.
Four banks, who have completed certification, are yet to live, whereas the remaining 11 banks are under the certification process.
API-based e-mandates are consumer-friendly, fast, frictionless and paperless, said Deepak Sharma, chief digital officer, Kotak Mahindra Bank in a statement.
Earlier, the Supreme Court in order had disallowed Aadhaar-based mandate system. This led to NPCI suspending e-mandate pushing banks to begin fresh e-mandates.
Continuing with the eNACH, which uses eKYC infrastructure, may result in contempt of the Supreme Court order, NPCI CEO Dilip Asbe had said last year adding that the NPCI will introduce alternatives in the form of net banking-based mandate and debit card-based eNACH.
According to Industry observers, the move will help fintech firms and banks to get recurring payments authentication from customers without many difficulties.