Reserve Bank of India announces its decision on implementing credit and debit card rules

Mumbai: The apex bank in the country, Reserve Bank of India (RBI) has extended the deadline to implement various provisions related to credit card issuance.  The timeline is extended till October 1. Earlier, the deadline was set at July 1.

‘Considering various representations received from the industry stakeholders, it has been decided to extend the timeline for implementation of the following provisions of the Master Direction to October 01, 2022’, said RBI in a statement.

Also Read:  Forex Market: Indian rupee slips down against US dollar, UAE dirham 

As per the new rule, if a user  does not activate a credit card within 30 days of issuance, the banks or card-issuers must seek a one-time password from the user to activate the card. If customer does not provide consent for activating the card, the issuer should close the card within seven working days without any extra cost. Card issuers must ask for explicit consent before increasing the credit limit on a credit card. Moreover, the terms and conditions for payment of credit card dues, including the minimum amount due, shall be stipulated.

Meanwhile, the rules for using debit and credit cards for online transactions in the country will change from July 1.Under the new rule, when a customer starts an online transaction, the merchant will initiate tokenization. It will ask for your consent to tokenize customer’s card. Once given consent, the merchant will send a tokenization request to the card network. The card network will then create a token, which will act as a proxy to the 16-digit card number and send it back to the merchant. The merchant will save this token for future transactions. You will also have to enter your CVV and OTP like before to approve transaction. If you want to use another card, the same process is to be followed again.

RBI in last year released debit card and credit card tokenization guidelines. As per the guidelines, merchants were prohibited from storing the data of customers’ cards on their servers. This was to protect and secure customer data. The deadline for adoption of card tokens across the country was extended by six months from January 1, 2022 to July 1, 2022.