RBI's New Debit Card Credit Card Rules in India: All you need to know

The Reserve Bank of India (RBI) has issued a new guidelines to make transactions through debit cards and credit cards more secure and convenient. It have come into effect from 1st October, 2020.
Created On: Oct 5, 2020 18:19 IST
Modified On: Oct 5, 2020 18:23 IST
 RBI's New Debit Card Credit Card Rules in India
RBI's New Debit Card Credit Card Rules in India

RBI's new credit and debit card rules are effective from 1st October, 2020. To make digital payment more secure by using debit and credit cards, the Reserve Bank of India has issued some guidelines. 

Before going into the detail about the guidelines, let us have a look at the reason behind new rules or guidelines that are issued by RBI.

As banking fraud cases are rising so to make digital payments using debit cards and credit cards more secure, convenient, reliable, and curb any misuse, RBI issued guidelines.

What are the new Cards?

At the time of issue/re-issue, all debit or credit cards shall be enabled to use only at ATMs and Point of Sale (PoS) devices within India. 

As before the notification, most of the banks that issued cards by default could be used anywhere in the world. But now, if customers want to use their debit or credit cards outside India then they have to request their banks for the facility.

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Now, what about the existing cards?

For existing debit or credit cards, the bank or issuers may take a decision that will be based on their risk perception that is whether to disable the card, not present (domestic and international) transactions, card-present (international) transactions, and contactless transaction rights.

Also, RBI asked all banks, card issuing companies to disable online payment for all debit, credit cards that have never been used for online or contactless transactions in India or abroad. 

As per new guidelines, customers are given more preferences.

Now, people will be able to register for preferences including opt-in or opt-out services, spend limits, and other services for online transactions, international transactions, and contactless transactions.

So now users will have 24X7 access to switch ON/OFF or change all transaction limits through all available channels like Mobile application/internet banking/ATMs/Interactive Voice Response (IVR).

What is NFC Technology?

Several banks have also issued cards based on near field communication (NFC) technology. And a merchant does not need to swipe such cards or insert them in the point of sale terminal. Then these are called contactless cards. Also, cardholders will get an option to enable or disable the NFC feature.

Are these rules apply to other cards also?

The new rules are applied to debit and credit cards only. But like Prepaid gift cards or those used at mass transit systems like the metro are not covered under these rules.

Do you know that skimmer is a small device that is used to steal the information? But now a cardholder can put the limit and beyond that, no one can withdraw money. So in this way fraud can be minimised.

No doubt these measures are significant in curbing the cyber frauds and also will make a debit, credit cards more secure, reliable and misuse of the cards could be curbed.

At last, let us tell you that these directions are issued by RBI under Section 10(2) of the Payment and Settlement Systems Act, 2007.

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