The Reserve Bank of India (RBI) on Wednesday asked all banks and card issuers to enhance security of card transactions and provide more options to protect debit and credit card customers from unauthorised transactions.
This includes, limiting usage of debit and credit cards in India or overseas and setting up limits in terms of value, for card transactions. This will apply for transactions carried out with the physical card, or online or where contactless card is used for making a payment.
In a notification, RBI says, "For existing cards, issuers may take a decision, based on their risk perception (of the customer), whether to disable the card in card not present transactions for domestic and international transactions, card present in international transactions and contactless transaction rights.”
This means, based on the customer's risk profile, the bank would make sure that the card must be physically presented for carrying out transactions in India and overseas. Also, for all transactions carried out overseas, the card issuer will make sure the card is physically present.
RBI says, “Existing cards, which have never been used for online for all physical card present or not present transactions should be mandatorily disabled for this purpose."
While issuing new cards or renewing old cards, the lenders are mandated to enable it for use only at contact based points of usage like at automated teller machines (ATMs) and point of sales (PoS) devices within India. For these cards, "Issuers should provide cardholders a facility for enabling card not present for domestic and international transactions, card present for international transactions and contactless transactions," it added.
RBI's decision to disable cards that have never been used for online transactions is a welcome step and would protect several poor customers as well as senior citizens from online frauds.
In addition, the central bank has asked all lenders to allow a facility to customers to switch on or off as well as set or modify transaction limits within the overall card limit, if any, set by the issuer for all types of transactions, including domestic and international, at PoS (point of sale), ATMs, online transactions and contactless transactions.
"The above facility on a 24x7 basis through multiple channels - mobile application, internet banking, ATMs, interactive voice response (IVR) and this may also be offered at branches or offices. (Lenders should provide) alerts, information and status through SMS or e-mail, as and when there is any change in status of the card," the RBI says.