The Reserve Bank of India has issued master directions for credit and debit card issuance in the year 2022. These fresh guidelines will come into effect from July 1, 2022. The guidelines apply to banks excluding payment banks, state co-operative banks, and district central co-operative banks. Also, all NBFCs operating in India should follow the new norms of card issuance.
As per the guidelines Banks shall formulate a comprehensive debit cards issuance policy with the approval of their Boards and issue debit cards to their customers in accordance with this policy. Prior approval of the Reserve Bank is not necessary for banks desirous of issuing debit cards to their customers.
Salient features of issuance of Debit cards as per new norms:
- Debit cards shall only be issued to customers having Savings Bank/Current Accounts.
- Debit cards should not be issued to cash credit/loan account holders. However, it will not preclude the banks from linking the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana accounts with a debit card.
- Banks shall not force a customer to avail debit card facility and shall not link issuance of debit card to availment of any other facility from the bank.
- In lieu of plastic debit cards, Scheduled Commercial Banks (other than RRBs) may issue other form factors in place of a plastic debit card such as wearables after obtaining explicit consent from the customer.
- Form factors issued in place of a debit card shall be subject to the specific and general guidelines applicable to debit cards. Banks shall submit a detailed report to the Department of Regulation, Reserve Bank of India, prior to the issuance of any such form factors. Any bank that has already issued such product prior to the effective date of the Master Direction, shall submit a detailed report to Department of Regulation within 30 days from the effective date.
- Banks shall provide options for disabling or blocking the form factor through mobile banking, internet banking, SMS, IVR or any other mode.
- The banks shall undertake review of their operations/issue of debit cards on half-yearly basis. The review shall include, inter-alia, card usage analysis including cards not used for long durations and the inherent risks therein