RBI asks banks to monitor end use of Credit Card and Debit Cards
The Master Direction on Credit Card and Debit Cards was revised by the Reserve Bank of India (RBI) on March 7. The new directive requires card issuers to set up an efficient system for tracking the final use of money.
The RBI stated that the revised regulations will take effect right away.
The central bank added that card transaction-related data may be directly extracted in encrypted form from the card issuer’s system and presented in the co-branding partner (CBP) platform with strong security for the convenience of the cardholder.
The RBI stated that the CBP would not access nor maintain the information shown on the platform; it would only be viewable to the cardholder.
The central bank stated in the updated master directives that card issuers are not allowed to provide cardholder card data, including transaction data, to their outsourcing partners unless doing so is absolutely necessary for them to perform the tasks that have been delegated to them.
The cardholder’s express consent must be sought before sharing any of the data mentioned above. The reserve bank further stated that it will be made sure that the card issuer is the only one who has ownership and storage of card data.
According to the RBI, card issuers shouldn’t sign any agreements with card networks that prevent them from using the services of other card networks, as said on March 6.
According to the RBI, card issuers must give their eligible consumers the choice to select from a number of card networks at the time of issuance. According to the RBI, this option might be made available to current cardholders when their next renewal comes up.
This action was taken after the RBI noted that certain current agreements between card issuers and networks do not support the availability of options for consumers.
American Express Banking Corp., Diners Club International Ltd., MasterCard Asia/Pacific Pte Ltd., National Payments Corporation of India–Rupay, and Visa Worldwide Pte Limited are the authorized card networks listed with the central bank.
When amending or renewing current agreements, card issuers and card networks must make sure the new regulations are applied by negotiating new agreements, according to the RBI.
