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August 25, 2014

RBI issues warning against violating credit card security norms

The Reserve Bank of India (RBI) has issued an order stating that all transactions involving domestic credit cards must be done in Indian currency through a bank in India.

By Verdict Staff

The Reserve Bank of India (RBI) has issued an order stating that all transactions involving domestic credit cards must be done in Indian currency through a bank in India.

The bank also stated that an additional layer of security has to be maintained for all online transactions.

RBI’s decision comes after local taxi companies had complained that Uber was not following the two-step verification process required for credit card transactions in India, according to Reuters.

All Uber payments are directly processed using the customer’s stored credit card information in a simple process that bypasses any monetary exchange between drivers and users. However, RBI did not specify any company’s name in its circular.

The circular noted: "It has come to our notice that despite the above clarifications there are instances of transactions being effected without the mandated additional authentication/validation even where the underlying transactions are essentially taking place between two residents in India.

"It is advised that entities adopting such practices leading to wilful non-adherence and violation of extant instructions should immediately put a stop to such arrangements."

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