Banks can issue only online debit cards: RBI
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Debit cards that do not ask for an authorisation code when used in shops or anywhere else will be discontinued soon.
The Reserve Bank of India has asked banks to issue only those debit cards, including co-branded ones, where typing such codes are mandatory, within the next six months.
A notification issued by RBI on Thursday said banks are not permitted to issue offline debit cards any more. "Banks which are presently issuing offline debit cards may conduct a review of their offline debit card operations and discontinue operations of such cards within a period of six months from the date of this circular".
This means soon anybody swiping a debit cards in a shop or petrol pumps will have to also type in their PIN. These are online debit cards and will replace all offline debit cards, the RBI said.
In an extensive review of the usage of debit cards in the economy, the RBI has also granted a general permission to banks to issue rupee denominated co-branded pre-paid cards, instead of having to approach it every time.
To prevent the use of stolen cards, the RBI also asked banks to consider issuing debit cards with photographs of the cardholders on them.
The RBI said the bank would be responsible for direct losses incurred by a cardholder due to a system malfunctions directly within the bank's control. However, the bank shall not be held liable for any loss caused by a technical breakdown of the payment system if the breakdown of the system was recognisable, the guidelines said.