The Reserve Bank of India has refused to extend the deadline for
upgrading security on credit card swipe machines and has ordered banks
to compensate cardholders in seven days if any fraud occurs on
non-compliant terminals.
If the bank fails to refund the disputed amount in seven days, it has to
compensate the cardholder with a penalty of Rs 100 per day until the
date of payment. At present, dispute resolution is a cumbersome process
and takes several weeks in case of credit card frauds.
Banks see the new directive as indicative of the central bank's
seriousness on card security. After a rise in credit card frauds, the
RBI had asked banks to add security features including an electronic
chip and a secret PIN which the cardholder is required to punch in the
terminal to authenticate payment. This feature was to come in force from
July 1. But banks were behind schedule in both issuing chip cards and
in upgrading terminals to meet the new security standards.
Since the entire industry was behind schedule, the RBI was forced to
extend the deadline. Banks were required to get credit card swipe
machines upgraded by September-end and have all the cards upgraded by
November. But a few days ahead of the September deadline, banks have
again said that they are not ready.
"Various banks have approached us, seeking further extension of the time
line of September 30, 2013 for complying with the task of securing the
technology infrastructure," the central bank said in a statement.
Pointing out that banks were told that there would be no further
extensions, the RBI said, "It has been decided not to grant any further
extension of time. Accordingly, banks not complying with the
requirements shall compensate loss, if any, incurred by the cardholder
using card at POS terminals not adhering to the mandated standards."
There are usually two banks in every credit card transaction. One that
issued the credit card and the other that has installed the swipe
machine. The RBI has said that the card issuing bank should ascertain in
three days whether the fraud has taken in a non-compliant machine and
within seven days refund the money to the cardholder. The card issuing
bank will in turn recover the money from the bank which has installed
the swipe machine.
Source : The Economic Times
No comments:
Post a Comment
Hi Friends,
Now Your Comments Will Appear Instantly with out verification. So give lot of comments.Feel Free!
Thank You.
By - TrbTnpsc. Team