RBI said that these steps are to check cyber frauds, curb the misuse of cards and make online and contactless transactions secure.
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With the intent of curbing bank frauds, the Reserve bank of India has issued a set of new rules for debit and credit cards. These rules will be effective from October 1, 2020, and will improve the convenience and security of card transactions.
The new rules will enable card holders to set withdrawal caps and change transaction limits. “For new cards being issued, the users will only be able to use these services after registering for them. The main reason for this is to prevent card fraud and misuse and give the consumer better power to manage his or her finances. With spend and withdrawal caps, even if an individual becomes a victim of cyber or ATM fraud, the damage will be limited,” Financial Express quotes Gaurav Chopra, CEO of IndiaLends.
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Here is a list of things to keep in mind
- The new rules will allow card holders to choose between opt-in and opt-out services, set transaction limits, and spend limits. They can also register for other services, international transactions and contactless transactions.
- All debit and credit cards can only be used in ATMs and Points of Sale within India. If customers want to use the card outside India they will have to get in touch with the bank to avail the facility. Earlier, cards of most banks were enabled international use.
- RBI has mandated all banks and card issuing companies to disable cards that have not been used for online transactions in India or abroad.
- Debit and credit card users will get the new facility of setting a transaction limit.
- As per new rules, all customers will have the facility to ON/OFF or change transition limits through any available channel; mobile application/internet banking/ATMs/Interactive Voice Response (IVR).
- The existing debit and credit card users will have to make a decision as to whether or not they want to disable the card and avail a new one.
- The new rules are only for debit and credit cards.
RBI said that "these directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007)," to check cyber frauds, curb the misuse of cards and make online and contactless transactions secure.
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