Understanding the New RBI Guidelines for Credit and Debit Cards
The Reserve Bank of India (RBI) has introduced several new guidelines to enhance the security of digital transactions via debit and credit cards. These measures come into effect from October 1, 2020, and are designed to safeguard users from cyber frauds and misuse. This article will provide a comprehensive overview of the changes in these guidelines.
Overview of New RBI Guidelines
The RBI has meticulously detailed several measures to ensure the security of digital payments using debit and credit cards. The guidelines aim to make these transactions more secure and prevent any unauthorized use or misuse of these cards. Let's break down each of the key points.
New Rules for Card Usage
Card Activation within India
At the time of issue or re-issue, all debit and credit cards must be enabled for use exclusively at ATMs and Point of Sale (PoS) devices within India. This ensures that the cards remain restricted to domestic transactions, thereby enhancing their security against any cross-border fraudulent activities.
Usage Outside India
Customers who wish to use their debit or credit cards outside India will need to request their banks to enable this facility. Prior to the implementation of these guidelines, most banks issued cards that were by default available for use globally. The new rules introduce a level of control over card usage locations to prevent unauthorized use.
Customizing Card Security Parameters
With these new guidelines, RBI has authorized issuers to decide on the extent of disablement of certain card transactions based on their perception of risk. For existing debit and credit cards, issuers may opt to disable card-not-present domestic and international transactions, card-present international transactions, or contactless transactions. This flexibility allows banks to tailor the security settings based on individual customer needs.
Disabling Online Payments
RBI has asked all banks and card issuing companies to disable online payments for debit and credit cards that have never been used for online or contactless transactions, whether in India or abroad. This measure aims to further secure user data and prevent potential identity theft.
User Transaction Preferences
Opt-in Opt-out Services
Now, customers can register for various transaction preferences, such as opting-in or opting-out of certain services, setting spend limits, and other transactional controls. These preferences can be customized according to their needs.
24x7 Transaction Limit Management
Users will have round-the-clock access to switch on/off or modify transaction limits via multiple channels, including mobile applications, internet banking, ATMs, and Interactive Voice Response (IVR). This ensures that users can manage their card security dynamically and in real-time.
Additional Security Features
The RBI guidelines also cater to the growing use of Near Field Communication (NFC) technology. Many banks have been issuing cards that support NFC, allowing users to make payments without swiping or inserting the card into a PoS terminal. Users now have the option to enable or disable the NFC feature as per their preference.
Transaction Limit Customization
Cardholders on both debit and credit cards will have the ability to set up personalized transaction limits. This customization feature helps users to tailor the security settings to their specific spending habits and preferences.
Application Scope
It's important to note that these new regulations are specific to debit and credit cards only. Prepaid gift cards or cards used in mass transit systems such as metro are not covered under these guidelines.
Conclusion
The new RBI guidelines underscore the increasing security concerns surrounding digital payments and aim to provide robust measures to safeguard users. The flexibility and control provided to users and issuers reflect a balanced approach to improving digital transaction security.
References
Source: Livemint