NPCI gets RBI nod for full net banking and debit card services
26 April 2019
The National Payments Corporation of India (NPCI) has received approval from the Reserve Bank of India (RBI) for implementing full-fledged e-mandates for both internet banking and debit cards.
Users of NPCI-backed debit cards 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.
NPCI, which received RBI’s final approval ten days ago, has already allowed seven banks to offer net banking based e-mandate. The banks that have so far implemented NPCI’s e-mandate include Yes Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Central Bank of India, Bank of Baroda and Punjab National Bank.
Kotak Mahindra Bank has extended both net banking and debit card-based mandates for customers, according to NPCI.
Four other banks have completed certification and are in the process of going live while 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 difficulty.
With the increasing penetration of internet, people are switching over to digital modes of payments. Apart from the use of online wallets and UPI transfers, people have also stepped into internet banking. According to a BCG report, the number of users opting for online banking in India is expected to reach 150 million by 2020.