New Credit and Debit Cards Rules to Prevent Cyber Frauds by RBI

New Credit and Debit Cards Rules to Prevent Cyber Frauds by RBI

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  • RBI directs banks and other card issuers to only allow domestic card transactions at ATMs and Point of Sale(PoS) terminals in India at the time of issuance/re-issuance of a card.
  • For international transactions, online transactions, card-not-present transactions, and contactless transactions, the customers need to separately set up services on their card/s.
  • New credit or debit card is issued it will, by default, only be used to physically swipe at an ATM or a PoS.
  • Existing card users can enable/disable their cards for various transactions. Also, they can modify the transaction limit(set/reset), within the overall card limit for all kinds of transactions.
  • The above facility should be provided 24×7 through numerous channels such as mobile application, internet banking, ATMs, Interactive Voice Response(IVR).
  •  For prepaid gift cards and cards being used at mass transit systems. 
  • Also, Existing cards, which have never been used for online transactions, should be mandatorily disabled to ensure security, the RBI notification said.

The Reserve Bank of India(RBI) has come out with new credit and debit cards norms, directing all banks to only allow domestic card transactions at ATMs and Point of Sale(PoS) terminals in India at the time of issuance/re-issuance of a card. To do international transactions, online transactions, card-not-present transactions, and contactless transactions, the customers need to separately set up services on their card/s. These rules will be applicable for new credit and debit cards, coming into effect from 16 March 2020. Well, which means when a new credit or debit is issued it will, by default, only be used to physically swipe at an ATM or a PoS. And, it will not be enabled for online and contactless transactions.

Issuers shall provide cardholders a facility for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions,” the RBI notification read.

In the case of existing card users, RBI had directed the banks to give users an authority to enable/disable their cards for various uses. Here, cardholders can also modify the transaction limit(set/reset), within the overall card limit for all kinds of transactions. Yes, the present credit and debit card users in India can switch on and switch off their cards at any point based on their usage and convenience. And, a user can also decide whether to disable any of the features or not. RBI further said that for existing cards, issuers can make a decision based on their risk appetite whether to disable the card not present (domestic and international) for transactions. 

Moreover,  the above facility should be provided 24×7 through numerous channels such as mobile application, internet banking, ATMs, Interactive Voice Response(IVR) and can be offered at branches and offices. The Central Bank also made it mandatory to send alerts/information/status through SMS or email for all such transactions or status changes in the card.   

However, this new provision is not mandatory for prepaid gift cards and cards being used at mass transit systems. Also, Existing cards, which have never been used for online transactions, should be mandatorily disabled to ensure security, the RBI added. 

This latest update of the RBI on credit and debit cards will help in reducing the volume of cyber crimes and improve security.

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