RBI Issues New Guidelines for Debit and Credit Card Companies

As per the guidelines of the Reserve Bank of India (RBI), credit and debit cardholders who have not used their cards to make online transactions will soon have their cards blocked for the same. The RBI has directed card issuers and banks to disable online services for those cardholders who have never transacted online. 

The RBI gave these directions as a part of enhancing the security for card-based transactions. As per this exercise, the existing or cards that are already issued will have to be blocked for contactless transactions if they have never been used for the same before.

The Central Bank in a statement said that for the existing cards, the issuers are authorised to decide if they should disable the cardless transactions (both domestic and international) and card-based transactions (international) depending on the level of risk involved. 

As per the RBI directions, all cards at the time of issue or reissue must be enabled only for the contact-based transactions such as usage at ATMs and point of sale (POS) devices within India. The facility for online or cardless purchases will no longer be available immediately after the issue or reissue of a card.

Also Read: RBI Nods to Enhance UPI with Recurring Payments Feature

The card issuers will now have to give users an option to enable cardless transactions for both domestic and international usage and card-based transactions for international transactions. As per the RBI guidelines, the card issuers are supposed to give the following facilities to the cardholders:

• An option to turn on or off, and set and vary the limits of transactions for all transactions, be it domestic or international, for transactions made at ATMs, Point of Sale (PoS) and online.
• This facility must be offered around the clock via mobile app, net banking, interactive voice response (IVR), and ATMs. Alternatively, this facility must also be provided at branches of the card issuers.
• Card companies must intimate the cardholders through email or SMS when there is a change in the status of their card.

Following these guidelines are necessary for prepaid gift cards and other mass transit systems. 

For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in