The Reserve Bank of India (RBI) on Thursday asked banks to implement various safety measures related to credit card and debit card usage over a period of next two years in order to eliminate cases of fraud and ensure security of transactions.
The RBI emphasised on the need to migrate to Euro pay MasterCard Visa (EMV) chip and PIN based cards from the present magnetic strip cards as the later is vulnerable to skimming and cloning. “The need for a complete migration to EMV chip and PIN based cards could be considered based on the progress of ‘Aadhar’ (Unique Identification Card) in about 18 months,” it noted. The RBI has directed banks to strengthen the existing payment infrastructure and future proofing system along with adoption of fraud risk management practices within a period of next 12-24 months. “There is an imperative need to secure card based transactions as well to protect the interests of the card holders,” it said.
In the circular, the central bank has directed banks to implement improved fraud risk management practices by September 30, 2012 and secure the technology set up by September 30, 2013.