Today, the number of people using debit and credit cards are on the rise. Debit and credit cards have become the most preferred method of making payments. As the usage of these cards goes up, card frauds are also increasing. A lot of people have become victims to card fraud and lost their hard-earned money.
So, with the intention of increasing the security of the card, the Reserve Bank of India has directed all banks to provide their customers the facility of enabling or disabling their cards for different purposes like online, physical, contact-less, domestic or international.
Along with this; cardholders are allowed to modify transaction limits within the overall card limit for all types of transactions like domestic and international at PoS, ATMs, online transactions and contactless transactions.
RBI has directed card issuers that at the time of the issue of the cards, they must enable cards only for use at contact-based points like ATMs and Point of Sale (POS) devices within India. This means when the new card is issued to the cardholders, they can use it only for the purpose of physically swiping at PoS or at an ATM. They won't be able to use it for online or contactless transactions. In order to make these transactions, the cardholder himself has to enable it. At present, as soon as the card is issued, it can be used for various purposes like swiping, online and contactless transactions.
RBI has issued directions that the cardholder must be provided with the facility to switch off or on the other facilities on their cards, after the card is issued to them. These directions issued by the RBI to improve the security of card transactions will come into effect from March 16th, 2020.
The RBI has also said that for the existing cardholders, issuers may take a decision, based on their risk perception and decide whether to disable the card, not present (domestic and international) transactions, card-present (international) transactions and contactless transaction rights. Existing cardholders, who have never used their card for online (card not present) / international/contactless transactions shall be mandatorily disabled for this purpose.
The above-mentioned facility will be available on a 24x7 basis through multiple channels like mobile application /internet banking / ATMs /Interactive Voice Response (IVR). The facility may also be offered at branches /offices.
RBI has directed that whenever there is a change in the status of the card, the cardholders must receive the alerts /information /status, etc., through SMS /e-mail.
The terms mentioned on this circular are not mandatory for prepaid gift cards and those used at mass transit systems.
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