July
13, 2007.
The
Chief Executive Officers of
All
Primary (Urban) Co-operative Banks
Dear
Sir/Madam,
Guidelines
for issue of ATM-cum-Debit Cards by UCBs.
Please
refer to our circular UBD
(PCB).BPD.Cir.No.50/09.69.000/05-06 dated April 28, 2006 permitting the banks
fulfilling certain eligibility norms to install ATMs and issue ATM-cum-debit cards.
2. It
has been now been decided to issue guidelines for issuance of ATM-cum-Debit Cards.
Banks which are authorized to install on-site /off-site ATMs, as per the policy
in force, may introduce ATM-cum-Debit cards with the approval of their Board keeping
in view the guidelines as given in Annex I. Issuance
of offline debit card is however, not permitted. The details of the ATM-cum-debit
cards introduced may be advised to the Regional Office concerned of the Reserve
Bank of India together with a copy each of the agenda note put up to their Board
and the resolution passed thereon.
3.
UCBs should not issue ATM-cum- debit cards in tie-up with other non-bank entities.
4. UCBs
may review operations of these cards and put up review notes to their Boards at
half-yearly intervals, at the end of March and September, every year. A report
on the operations of these cards issued by banks should be forwarded to the Reserve
Bank of India , Department of Payment and Settlement Systems (DPSS) with a copy
to the Regional office concerned of Reserve Bank of India on a half yearly basis,
say at the end of March and September every year, incorporating information as
indicated in Annex II.
Yours
faithfully,
(N.S.Vishwanathan)
Chief
General Manager-in-Charge
ANNEX
I
Guidelines
for Issuance of ATM-cum- Debit Cards by UCBs-
1. Coverage
The
guidelines apply to the cards encompassing all or any of the following operations:
Electronic
payment involving the use of card, in particular at point of sale and such other
places where a terminal / device for the use / access of the card is placed.
The
withdrawing of bank notes, depositing of bank notes and cheques and connected
operations in electronic devices such as cash dispensing machines and ATMs.
2. Cash
Withdrawals
No
cash transaction, that is, cash withdrawals or deposits should be offered at the
Point of Sale, with the ATM-cum-debit cards under any facility, without prior
authorization of RBI under Section 23 of the Banking Regulation Act, 1949.
3. Eligibility
of Customers
The
banks can issue ATM-cum-debit cards to select customers as per their own eligibility
criteria subject to compliance with 'Know Your Customer' guidelines. Banks can
extend the ATM-cum- debit card facility to those having saving bank account /
current account / fixed deposit accounts with built-in liquidity features maintained
by individuals, corporate bodies and firms. Debit card facility should not be
extended to cash credit / loan account holders.
4. Security
and other aspects
(a)
The bank shall ensure full security of the card.
(b)
No bank shall despatch a card to a customer unsolicited, except in the case where
the card is a replacement for a card already held by the customer.
(c) Banks
shall keep for a sufficient period of time, internal records to enable operations
to be traced and errors to be rectified (taking into account the law of limitation
for the time barred cases).
(d) The
cardholder shall be provided with a written record of the transaction after he
has completed it, either immediately in the form of receipt or within a reasonable
period of time in another form such as the customary bank statement.
(e) The
cardholder shall bear the loss sustained up to the time of notification to the
bank of any loss, theft or copying of the card but only upon a certain limit or
fixed amount or a percentage of the transaction agreed upon in advance between
the card holder and the bank, except where the card holder acted fraudulently,
knowingly or with extreme negligence.
(f) Each bank shall provide means whereby its customers may at any time of
the day or night notify the loss, theft or copying of their payment devices.
(g)
On receipt of notification of the loss, theft or copying of the card, the bank
shall take all action open to it to stop any further use of the card.
5. Terms
and Conditions for issue
The
relationship between the bank and the card holder shall be contractual. As such:
a)
Each bank shall make available to the cardholders in writing, a set of contractual
terms and conditions governing the issue and use of such a card. These terms shall
maintain a fair balance between the interests of the parties concerned.
b)
The terms and conditions shall be expressed clearly.
c)
The terms shall specify the basis of any charges, but not necessarily the amount
of charges at any point of time.
d)
The terms may be altered by the bank, but sufficient notice of the change shall
be given to the cardholder to enable him to withdraw if he so chooses. A period
shall be specified after which time the cardholder would be deemed to have accepted
the terms if he had not withdrawn during the specified period.
e)
(i) The terms shall put the cardholder under an obligation to take all appropriate
steps to keep safe the card and the means (such as PIN or code) which enable it
to be used.
(ii) The
terms shall put the cardholder under an obligation not to record the PIN or code,
in any form that would be intelligible or otherwise accessible to any third party
if access is gained to such a record, either honestly or dishonestly.
(iii) The
terms shall put the cardholder under an obligation to notify the bank immediately
after becoming aware:
of
the loss or theft or copying of the card or the means which enable it to be used;
of
the recording on the cardholder's account of any unauthorised transaction;
of
any error or other irregularity in the maintaining of that account by the bank.
(iv)
The terms shall specify a contact point to which such notification can be made
and that such notification can be made at any time of the day or night.
(v) The
terms shall put the cardholder under an obligation not to countermand an order
which he has given by means of his card.
g) The
terms shall specify that the bank shall exercise care when issuing PINs or codes
and shall be under an obligation not to disclose the cardholder's PIN or code,
except to the cardholders.
h) The
terms shall specify that the bank shall be responsible for direct losses incurred
by a cardholder due to a system malfunction directly within the bank's control.
However, the bank shall not be held liable for any loss caused by a technical
breakdown of the payment system if the breakdown of the system was recognizable
for the cardholder by a message on the display of the device or otherwise known.
The responsibility of the bank for the non-execution or defective execution of
the transaction is limited to the principal sum and the loss of interest subject
to the provisions of the law governing the terms
ANNEX
II
Reporting
Format for the Issue and Operations of ATM-Cum-Debit Cards-
1.
Name of the Bank-
2. Period
of Reporting-
3. Type of
the card with hardware components-(IC Chip) eg.,
Magnetic strip, CPU, Memory-
4.
Type of the software used-
5.
Security standards followed-
6.
Service provider (Self or otherwise)-
7.
Total number of outlets where the ATM-cum-debit card can be used of which-
(a)
POS Terminal-
(b) Merchant
Establishment-
(c) ATMs-
(d)
Others please specify.
8.
Total number of cards issued-of which-
(a)
against Currant account-
(b)
against Savings account-
(c)
against Float Account-
9.
Total Number of Transactions during the period-
10.
Amount involved in the Total Number of Transactions-
11. Instances of frauds, if any, during the period.
(a)
No. of frauds-
(b) Amount Involved-
(c) Amount of loss to the bank-
(d)
Amount of loss to the card holder-