RBI Adds FASTag, NCMC Auto-Replenishment to E-Mandate Framework

The Reserve Bank of India (RBI) has updated its e-mandate framework to include the auto-replenishment of balances in FASTag and the National Common Mobility Card (NCMC). Under the new rules, these auto-replenishment transactions, which occur when balances fall below a customer-defined threshold, will no longer require a pre-debit notification. This change aims to streamline recurring transactions that are irregular and lack fixed periodicity.

Updated Rules for Auto-Replenishment

As per the latest RBI circular, auto-replenishment transactions for FASTag and NCMC will now fall under the e-mandate framework. This means that these transactions will be exempt from the pre-debit notification requirement, which typically mandates a 24-hour advance notice before any debit from the account. The RBI’s decision reflects an effort to facilitate transactions that are essential yet variable in timing.

Background and Rationale

The e-mandate framework was initially introduced in 2019 to enhance customer protection by requiring advance notifications of debits. However, with the need to accommodate flexible and essential services like toll payments and mobility card top-ups, the RBI has updated the regulations. These services, while recurring, do not follow a fixed schedule, justifying the removal of pre-debit notifications.

Historical Context

In 2019, the RBI emphasized the importance of pre-transaction notifications as a customer safeguard. This included offering options for receiving these notifications and allowing changes to the notification mode. The recent updates align with the RBI’s commitment to balancing customer protection with the practical needs of recurring payments.

Key Points About RBI

Full Form: Reserve Bank of India.

Established: April 1, 1935.

Headquarters: Mumbai, Maharashtra, India.

Governor: Shaktikanta Das (as of 2024).

Functions

Monetary Authority: Formulates and implements monetary policy to ensure price stability.

Regulator: Oversees and regulates the financial sector, including banks and non-banking financial companies (NBFCs).

Issuer of Currency: Issues and manages the Indian Rupee.

Custodian of Foreign Exchange: Manages the foreign exchange reserves and facilitates external trade and payments.

Developmental Role: Promotes and regulates financial inclusion and economic development.

Organizational Structure: Governed by a central board of directors, which includes the Governor, Deputy Governors, and appointed directors.

Main Objectives: To ensure monetary stability, regulate the financial sector, and manage foreign exchange reserves.

Recent Initiatives: Includes updates to digital payment frameworks, financial inclusion programs, and regulatory measures to enhance financial stability.