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How the new RBI rules affect your cards

Updated: Jun 8, 2020

The credit cards in circulation in India had touched 50 million cards in May 2019, a growth that is fueled in part by the usage of cards by women and millennials in smaller cities. More and more Indians use a credit card to benefit from the reward points that they can earn on it.

In a recent poll on the Basis community, 64 per cent of women said they owned a credit card of their own while 31 per cent did not own or wish to own one. In the discussions on the community and general research on the subject, safety emerges as a major concern that deters people from using credit cards.

Credit and debit cards are an integral part of our lives, and the Reserve Bank of India issued directives on 16th January 2020 about them. These directives aimed to make card transactions safer will come into effect from 16th March 2020.

Given the increasing usage of these payment methods, the RBI has taken steps to increase safety and make the card user more aware of its provisions. So here is what you need to know will change, when the directives come into effect:

  • When credit and debit cards are issued or renewed, they can only be used for ATM withdrawals and Point of Sale (POS) transactions such as payments in stores.

  • Many other actions of cards which were default earlier will have to be opted-in. These include international usage, online usage and contactless payments (non-swiping usage at POS). You will need to activate such facilities on your cards.

  • You will be able to shut on and off certain features on your cards, for instance, you can ‘turn on’ your card when you want to withdraw from the ATM and ‘turn off’ soon after. You can do the same for other transactions.

  • Within the overall limit of your credit card, you will be now able to set and modify transaction limits.

  • If you have never used an existing card online, it will be mandatorily disabled for transactions after 16th March 2020.

  • Banks will be required to offer the activation of these services 24x7, through multiple channels such as banking apps, internet banking, ATMs, Interactive Voice Response (IVR) and their physical offices.

The new regulation is another move towards better security for card users. While some of these new changes may feel like more 'work' for the user, any regulation that gives her more decision-making powers is beneficial. We’d recommend reviewing your cards - both debit and credit - for their usage, and opt for the new safety measures available.

To learn more about money management, discuss all things money with a community of financially independent women and get personalised investing advise, sign-up for Basis now. India’s only personal finance platform focussed on women.

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