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October 1, 2020

Reserve Bank of India issues new guidelines on credit and debit cards

The Reserve Bank of India (RBI), the country’s central bank, has issued new guidelines on credit and debit cards in order to make digital payments more secure.

RBI has issued 10 new guidelines, which have become effective from today.

According to the new rules, all debit and credit cards at the time of issuance or re-issuance should be enabled for use only at ATMs and point-of-sale (POS) devices within India.

For using the cards outside the country, customers will need to request their banks.

The cards that have been issued before the new guidelines can be used anywhere in the world.

On evaluating the risk profile, banks can then decide whether to disable certain transactions.

They can also revoke the card-not-present (CNP) domestic and international transactions, the card-present international transactions, and contactless transaction rights.

RBI has urged all banks and issuers to disable online payment for all debit and credit cards, which have not been used for online or contactless transactions in India or abroad.

Furthermore, applicants can now opt-in or opt-out of specific services, spend limits, and more, for online, international, and contactless transactions.

They can switch on or off their cards, as well as change the transaction limits, via mobile app, internet banking, ATMs, and interactive voice response (IVR).

Given that many banks have been issuing near field communication (NFC)-enabled contactless cards, cardholders will also have the option to enable or disable the NFC feature.

The new guidelines do not, however, apply to prepaid gift cards or top-up cards.

In a statement, RBI said: “These directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).”

RBI aims to reduce the misuse of debit and credit cards through these new guidelines, amid the increasing instances of cyber breaches.

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