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RBI tightens norms for debit, credit card issuance & usage to improve security

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On January 15, 2020, In view of the increasing cases of cyber fraud, India’s central bank, the Reserve Bank of India (RBI) has framed new rules under “Enhancing Security of Card Transactions” to further protect debit, credit card transactions. These directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) & will come into effect from 16 March,2020.New Norms:

i.Facility to switch on, off cards: Under this, now transactions at ATMs(Automated Teller Machine) and PoS (Point of Sale) will be done through domestic cards. In addition, RBI directed banks and other card issuing companies to allow their customers to switch on and off their debit and credit cards.

ii.The RBI also directed that all physical or virtual cards be enabled to be used only at contact based point of use (ATM and PoS) at the time of issue or re-issue.

iii.The card issuing company / bank should allow its cardholders to enable 3 facilities, ‘card not present’ transactions / online transaction (domestic and international), card present (international) transactions and contactless transactions.

iv.Enable or disable the card in many ways:

The facility to switch on / off the card, set / modify the limit of the transaction should be given at all times and through various means. Mediums include mobile applications, Internet banking, ATM or interactive voice response (IVR) on a 24×7 basis.

Card issuers will have to give alerts/information/status, etc., through SMS / e-mail, as and when there is any change in the status of the card .

v.The card issuing company can take a decision based on risk perception of whether to disable the right of existing card not present (domestic and international) transactions, card present (international) transactions and contactless transactions.
The existing cards which have never been used for online / international / contactless transactions, must be disabled for these things. However, this RBI directive is not mandatory to be applied for prepaid gift cards and cards used in mass transit systems.

About Reserve Bank of India (RBI):
– Mumbai, Maharashtra
Formation– 1 April 1935
Governor– Shaktikanta Das
Deputy Governors– 4 (BP Kanungo, N S Vishwanathan, Mahesh Kumar Jain, Michael Debabrata Patra)