The Reserve Bank of India (RBI) on Wednesday allowed banks to issue online debit cards, including co-branded debit cards and rupee denominated co-branded pre-paid cards, without seeking the prior approval of the central bank. The move is “to obviate the need for banks to approach the RBI for every co-branding arrangement”, it said in a circular.
However, bankers should conform to the norms laid down by the RBI while issuing such cards. The RBI has asked banks to follow board-approved policies. Strict compliance with KYC (know your customer) norms, AML (anti-money laundering) standards, CFT (combating of financing of terrorism) and obligation of banks under PMLA (Prevention of Money Laundering Act) is a must, the banking regulator said.
The RBI also said that henceforth banks are not permitted to issue offline debit cards. “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,” said RBI.
RBI also stressed that the confidentiality of the customers should be maintained. Besides, the RBI also asked banks to comply with instructions laid down by Department of Payment and Settlement Systems of the RBI.
In the second-quarter review of the monetary policy held on October 30, the RBI had proposed to accord the general permission.