Reserve Bank of India (RBI) has recently implemented noteworthy amendments to the Master Direction governing credit and debit cards. In light of these changes:
Business card issuers are now mandated to establish and maintain an effective mechanism to scrutinize the end use of funds, ensuring responsible utilization.
Card issuers are required to transparently communicate to cardholders the potential repercussions associated with making only the minimum amount due payment, fostering greater financial awareness among consumers.
Banks and Non-Banking Financial Companies (NBFCs) no longer need prior approval to become co-branding partners of card issuers, streamlining the collaboration process and promoting innovation in card offerings.
Stricter guidelines dictate that card issuers must refrain from sharing cardholder data with outsourcing partners unless it is indispensable for discharging specific functions, thus safeguarding sensitive information.
In instances where data sharing with outsourcing partners is deemed necessary, explicit consent from the cardholder is now a prerequisite, reinforcing privacy measures and ensuring consumer consent.
Emphasizing data security, the RBI stipulates that the storage and ownership of card data must unequivocally remain under the purview of the card issuer, ensuring robust safeguards against data breaches.
Card issuers are required to implement effective monitoring mechanisms to detect and prevent fraudulent activities, enhancing overall security and trust in the card payment ecosystem.
The RBI emphasizes the importance of timely and accurate reporting of card transaction data to enable better oversight and regulation of the card industry.
Card issuers are encouraged to adopt innovative technologies and practices to improve the efficiency and security of card transactions, fostering a more competitive and dynamic market.
The amendments aim to enhance consumer protection, promote fair practices, and strengthen the resilience of the card payment system against emerging threats and challenges in the financial landscape.
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