New Delhi:
The Reserve Bank of India has ordered banks to migrate all ATM cards from the ones with magnetic stripes to those that use EMV chips and PINs. This, the central bank says, will secure transactions made with these cards at ATMs and merchant outlets.
"We want the migration to be done as fast as possible. The instruction is that banks in India and white label ATM operators have to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by September 30, 2017," said a senior RBI official, adding, "All new ATMs shall necessarily be enabled for EMV Chip and PIN processing from inception."
The RBI has been trying to simplify and promote the use of cards by consumers at ATMs and to make purchases and has encountered a rising number of cases of cloning of cards, skimming and other frauds which hurt consumers.
The central bank says cards which use magnetic stripes for identification are easier to defraud than those with chips and pins.
It also recently surveyed 4000 ATMs across the country in both urban and semi urban areas and found that a third of them were not operational and did not provide proper operating and safety instructions.
Thursday's RBI notification to banks said that the shift from magnetic strips to chip and pin-based cards would increase the preparedness of banks for the proposed "EMV Liability Shift" for ATM transactions, when it is implemented.
To ensure regional and location parity and to ensure uniformity in the card payments ecosystem, infrastructure banks have been mandated to install this facility even in their micro ATMs which are enabled to handle card-based payments.
The RBI will monitor implementation and has asked for a quarterly progress report to be sent by every bank.