RBI New Guidelines For Debit and Credit Cards

Last Updated : March 16, 2020, 6:33 p.m.

As we can see that the fraudulent activities related to the Debit and Credit Cards are increasing day by so, the RBI has provided certain guidelines related to the Debit and Credit Cards. It has warned the financial institutions to keep an eye on the credit limit of the credit cards and apply more security to the various transactions. The rules mentioned by the Reserve Bank of India is Effective from the 16th of March 2020.

Guidelines from RBI to the Banks and NBFCs

• The Bank should only allow the debit or credit cardholder to do only domestic transactions through ATM Machines and Pos Machines while issuing or reissuing the card.
• All the cardholders have to ask the bank to activate the online transaction facility, international transaction facility, and contactless payment services separately. All these services will not be provided with the issuance of the debit or credit card .
• Existing cardholders who have never used their debit or credit card for online, international transactions and contactless payment yet, will not be allowed to do these transactions from March 16, 2020, unless and until they get permission from the bank.
• The banks have the power to decide whether to disable the online transaction facility, international transaction facility, and contactless payment services or not depending upon the customer.
• All the banks should provide the facility to the cardholders to manage their credit limit through Mobile Banking and Net Banking for all types of transactions like online transactions, international transactions, and contactless payment services.
• The RBI has asked all the banks to put block the international transactions of those cardholders who haven’t used their card for doing the international transaction till the 16th of March 2020.
• All the users must have a 24×7 access facility into the Mobile Application and Net banking.
• Services like Online Transactions, International Transactions, Card-Not-Present Transactions, and Contactless Payment used to come with the cards but now the cardholder has to activate these services through a request to the bank.
• These guidelines are not applicable to the prepaid gift cards and the cards that are used in the mass transit system.

Reasons for Giving the Guidelines

• There is an increase in fraudulent activities through debit and credit cards so it becomes necessary to stop such activities.
• The usage of Credit Cards is increasing day by day and some users become insolvent to pay the debts of these credit cards. As a result, the banks are going into losses. Therefore the RBI has put a limitation on some transactions of the credit and debit cards.
• The emergence of cyber crimes is at boom so it is necessary to take some precautionary steps.

Read all the RBI Guidelines for Debit and Credit Card carefully and see the reason why these guidelines have been given by the RBI. Have a Look at all the rules that are related to the users and must be followed by all the financial institutions.