RBI disallows banks to issue offline debit cards, tighten norms

The Reserve Bank of India (RBI) in its recent directives told the banks not to allow offline debit cards.

As per the recent directives banks have been told to:

Issue debit cards if demanded to customers having Savings Bank and Current Accounts but not to cash credit or loan account holders.

  • Issue only online debit cards, including co-branded debit cards where there is an immediate debit to the customers’ account, and where straight through processing is involved.
  • Banks, henceforth, are not allowed to issue offline-debit cards.
  • Discontinue such operations within a period of six months.
  • Provide cardholders contractual terms and conditions in written form, regarding the issue and use of such cards.
  • Specify that banks will be responsible for direct losses incurred by a cardholder due to a system malfunction directly within the bank’s control. Banks would not be responsible for any loss caused by a technical breakdown of the payment system if the breakdown of the system was recognizable for the cardholder by a message on the display of the device or otherwise known. The responsibility of the bank for the non-execution or defective execution of the transaction is limited to the principal sum and the loss of interest subject to the provisions of the law governing the terms.
  • Curtail the misuse of lost/stolen cards by issuing issue cards with photographs of the cardholder or any other advanced methods that may evolve from time to time.
  • Undertake review of their operations/issue of debit cards on half-yearly basis.
  • Put in place an effective mechanism for redressal of customer complaints and must make available the name, designation, address and contact number of important executives as well as the grievance redressal officer of the bank on its the website.
  • Create a system of acknowledging customers’ complaints for follow-up, such as complaint number / docket number.



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