RBI Issues New Rules for Debit and Credit Cards

Considering the rising volume of card transactions, RBI has issued a new set of rules for debit and credit cards. On Wednesday, the Reserve Bank of India released new guidelines to enhance user convenience and security of card transactions. RBI acclaims that “over the years, the value and volume of transactions made through cards have increased manifold.” Let’s take an insight into the entire story.

Highlights of the RBI New Rules for Card Transactions

RBI has issued new rules in regards to debit and credit cards under Section 10 (2) of Payment and Settlement Systems Act, 2007. Here are the key points of the notification:

The Reserve Bank of India asks banks to enable domestic card transactions at PoS terminals and ATMs in India at the time of issuance or re-issuance of the card.

at the time of issuance or re-issuance of the card. As per new rules, the customers shall have to set up separate services on their cards for transactions such as international, online, card-not-present , and contactless.

on their cards for transactions such as international, , and contactless. Further, for the existing cards, the issuers may decide based on their risk perception. The issuers candisable the card not present for domestic, international, and contactless transaction rights.

not present for transaction rights. Also, existing cards that have never been utilized for international/online/ contactless transactions shall get disabled mandatorily for such purpose.

shall get disabled mandatorily for such purpose. The debit and credit card users will have 24*7 access to either switch on/off or modify the transaction limits. Thereby the users can change transaction limits through different channels available like internet banking, mobile application , Interactive Voice Response (IVR), ATMs etc .

access to either switch on/off or modify the transaction limits. Thereby the users can change transaction limits through different channels available like internet banking, , . Moreover, the issuers facilitate cardholders to switch on/ off and set transaction limits for all types of transactions ranging from domestic and international to online transactions / contactless transactions at PoS or ATMs.

transactions at PoS or ATMs. RBI provisions are not compulsorily for prepaid gift cards and the cards used at mass transit systems.

Note :- RBI new debit and credit card rules will come into effect from 16th March 2020.

Apply now to change your Magnetic Stripe Debit Cards to the more secure EMV Chip and PIN based SBI Debit card at your home branch by 31st December, 2019. Safeguard yourself with guaranteed authenticity, greater security for online payments and added security against fraud. pic.twitter.com/t9K3TiGTad — State Bank of India (@TheOfficialSBI) November 30, 2019

The Purpose of RBI Guidelines

The fundamental objective of RBI for issuing new norms was to render a standard framework to the banks to align with the best customer practices. The banks have to follow new rules and regulations while issuing credit, debit, prepaid cards. Moreover, NBFCs and banks must adopt adequate safeguards and implement the latest guidelines of RBI to ensure that their card operations run on a prudent, sound, and customer-friendly manner. Also, the notification is a robust step to uplift the security level amidst the increasing cases of cyber frauds.

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