For the security of ATM cardholders, RBI has asked banks to allow only domestic cards at ATMs and PoS at the time of issuing cards in India. RBI has instructed banks that bank account holders will have to get separate ATM cards for international transactions. On the other hand, for online transactions, non-card transactions and contactless transactions, customers have to set up the services on their card separately. In this rule, the customer will also get the facility to set the transaction limit of their ATM card.
The new rule will come into effect from 1st March. RBI has asked all banks to apply new rules for new cards from March 16, 2020. Under the new rule, banks now allow customers to make domestic transactions while issuing debit and credit cards. This means that foreign transactions will not be allowed for withdrawing money from ATM machines.
The account holders will have to take permission from the bank for international transactions, online transactions, and contactless card transactions. Whereas the old ATM cardholders themselves have to decide according to their needs which service they want to activate the service under these rules. And who doesn’t? This rule will help to decrease cases of ATM fraud.
Few things to know about new ATM rules:
The RBI said that the facility of switching on / off the card, setting the limit of the transaction should be given at all times and through various means. Mediums include mobile applications, Internet banking, ATM or interactive voice response.
RBI said that the card-issuing company can make a decision based on risk perception of whether to disable the right of existing card not present (domestic and international) transactions, card-present (international) transactions and contactless transactions.
RBI said that the existing cards which have never been used for online/international/contactless transactions must be disabled for these things. However, this RBI directive is not mandatory to be applied for prepaid gift cards and cards used in mass transit systems.
