RBI allows users to enable, disable credit, debit cards; modify usage limit

With an eye on the growing number of digital transactions via credit and debit cards, the Reserve Bank of India (RBI) has floated new features for banks to ensure security and convenience of card users. Under the new rules, banks will be able to issue credit and debit cards that can be used only at ATMs and with PoS devices. The choice of using the cards for contactless and international transactions will lie with the user, the central bank directed on Wednesday.

The RBI mandated that all cards will be enabled to use only at contact-based points of usage, like ATMs and point of sale (PoS) devices, within India. "Issuers shall provide cardholders a facility for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions," the apex bank added.

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"For existing cards, issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights," the RBI said. "Existing cards which have never been used for online (card not present) / international / contactless transactions shall be mandatorily disabled for this purpose."

The cards should come with a facility to switch them on and off and modify transaction limits within the overall card limit, if any, set by the issuer. The issuers have been directed to extend these facilities round the clock through multiple channels, including mobile application, internet banking, ATMs, Interactive Voice Response (IVR) and branches. Any change in the status of the card should be conveyed through SMS and emails, the RBI stated.

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The RBI has clarified that the provisions of this circular will not be mandatory for prepaid gift cards and smart cards used in mass transit systems like Delhi Metro, Mumbai Metro, Namma Metro, etc.

"These directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect from March 16, 2020," the central bank said in its statement.

Recently, after the RBI's order, all banks replaced magstripe cards with EMV chip-based cards to ensure secure transactions via ATMs and PoS devices.

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