The Reserve Bank of India (RBI) on December 12 stipulated that debit cards would be issued to customers having Savings Bank and Current Accounts but not to cash credit or loan account holders.
Banks may issue only online debit cards, including co-branded debit cards where there is an immediate debit to the customers’ account, and where straight through processing is involved, RBI said.
“Banks are, henceforth, not permitted to issue offline-debit cards. Banks which are now 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,” RBI said in a notification to all banks.
Banks were also asked to ensure that customers were duly informed regarding switching over to online debit cards. However, till such time as offline cards were phased out, the outstanding balances / unspent balances stored on the cards would be subject to computation of reserve requirements.
Banks should undertake review of their operations/issue of debit cards on half-yearly basis. The review would include, inter-alia, card usage analysis, including cards not used for long durations due to their inherent risks.
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