Guidelines for the issue of Smart / Debit Cards by banks - RBI - Reserve Bank of India
Guidelines for the issue of Smart / Debit Cards by banks
FSC.BC. 123 /24.01.019/99-2000 November 12,1999 All Scheduled Commercial Banks (excluding RRBs) Dear Sir, Guidelines for the issue of Smart / Debit Cards by banks Some of the banks have introduced Smart Cards/ Debit cards and some more are desirous of introducing such cards. Since Smart Cards/ Debit Cards are new payment instruments, it has been considered necessary to issue broad guidelines to banks including safeguards to be observed in this regard. The guidelines are given in the Annexure-I for compliance by banks. 2. Banks may introduce Smart / Debit Cards with the approval of their Boards, keeping in view the Guidelines enclosed. While banks need not obtain the prior approval of the RBI, the details of smart / debit cards introduced may be advised to us together with a copy each of the agenda note put up to their Boards and the resolution passed thereon. It is advised that banks should not issue smart/debit cards in tie-up with any other non-bank entities. 3. The banks should review operations of Smart / Debit Cards and put up review notes to their Boards at half-yearly intervals, say, as at the end of March and September, every year. 4. A report on the operations of the Smart/ Debit Cards issued by banks may be forwarded to the Adviser-in-Charge, Reserve Bank of India, Monetary Policy Department, Mumbai 400 001 on a fortnightly basis, i.e., as on the reporting Friday, incorporating information as indicated in Annexure-II. 5. Please acknowledge receipt. Yours faithfully, ( P.V. Subba Rao ) Enclosure: As above The guidelines for the Issue of the Smart Cards/ Debit Cards by banks 1. Coverage: The guidelines apply to the smart cards/cards encompassing all or any of the following operations
2. Cash Withdrawals No cash transaction, that is, cash withdrawals or deposits should be offered at the Point of Sale, with the smart / debit cards under any facility, without prior authorisation of RBI under section 23 of the Banking Regulation Act, 1949. 3. Eligibility of Customers: The banks should issue the smart/ debit card to its customers having good financial standing and who have maintained the accounts satisfactorily for at least six months. However, the banks can issue on line debit cards to select customers with good financial standing even if they have maintained the accounts with the banks for less than six months. Banks can extend the Smart Card/ Debit Cards facility to those having saving bank account/ current account / fixed deposit accounts with built-in liquidity features maintained by individuals, corporate bodies and firms. Smart Card/ Debit Card facility should not be extended to cash credit/ loan account holders. The banks can, however, issue on line debit cards against personal loan accounts, where operations through cheques are permitted. 4. Treatment of Liability: The outstanding balances / unspent balances stored on the smart / debit cards shall be subject to the computation for the purpose of maintenance of reserve requirements. This position will be computed on the basis of the balances appearing in the books of the bank as on the date of reporting. 5. Payment of interest: In case of smart cards having stored value (as in case of the off-line mode of operation of the smart card), no interest may be paid on the balances transferred to the smart cards. In case of debit cards or on line smart cards, the payment of interest should be in accordance with the interest rate directives issued to banks from time to time under Sections 21 and 35A of the Banking Regulation Act, 1949. 6. Security and other aspects:
7. Terms and Conditions for issue: The relationship between the bank and the card holder shall be contractual. In case of contractual relationship between the cardholder and the bank:
(ii) The terms shall put the cardholder under an obligation not to record the PIN or code, in any form that would be intelligible or otherwise accessible to any third party if access is gained to such a record, either honestly or dishonestly. (iii) The terms shall put the cardholder under an obligation to notify the bank immediately after becoming aware:
(iv) The terms shall specify a contact point to which such notification can be made. Such notification can be made at any time of the day or night. (v) The terms shall put the cardholder under an obligation not to countermand an order which he has given by means of his card.
Reporting format for the issue and operations of the Smart Cards/ Debit Cards: 1. Name of the bank: 2. Period of reporting: 3. Type of the card with the hardware components - (I. C. Chip) e.g. Magnetic stripe, CPU, memory : 4. Type of the software used : 5. Names of products offered through the smart card: 6. Limits on the storage of the amount: 7. Re-loadability features: 8. Security standards followed : 9. Service provider: ( self or otherwise ) 10. Total no. of outlets where the smart cards can be used: Of which a. POS Terminals: b. Merchant Establishments: c. ATMs:d. others - ( please specify) 11. Total no. of cards issued: Of which
12. Total amount of balance stored on the smart cards as on the date of reporting: 13. Total amount of unspent balance on the smart cards as on the date of reporting: 14. Total no. of transactions during the period : 15. Amount involved in the total no. of transactions: 16. Transaction settlement mechanism (full procedure) :
17. Instances of fraud, if any, during the period : a. No. of frauds: b. Amount involved: c. Amount of loss to the bank: d. Amount of loss to the card holder:
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