RBI mandate aimed at making transactions more secure

Don’t forget your debit card PIN, for you’ll need to punch it in after swiping your card at any retail outlet from December 1.

For the past two days, customers of HDFC Bank and Kotak Bank, among others, have been receiving SMS alerts to use their existing ATM PIN number at retail outlets according to RBI’s mandate.

This is intended to make your debit card transactions more secure.


According to the RBI, the increasing use of debit cards and ATMs has increased the scope for frauds.

“While the current fraud levels are low… early cases of domestic counterfeit and skimming are being observed. Currently, counterfeit fraud is more prevalent internationally,” an RBI working group report on the subject, said.

Card skimming is the illegal copying of information from the magnetic strip of a creditcard.

Cost factor

The report discusses new systems. One is the EMV (EuroPay, MasterCard, Visa) chip cards with PIN that has been adopted by many countries.

Based on detailed evaluation, the RBI’s working group came up with three solutions that include a combination of magnetic strip card and PIN, magnetic strip card and biometric (Aadhaar fingerprint) and EMV chip card and PIN. The hindering factor in early adoption could be the cost of EMV chip card and PIN solution, which is quite high relative to the cost of the other options and relative to the revenue of the industry.

The estimated cost in EMV chip card and PIN is 34 times that of the magnetic strip and PIN card, while that of Aadhar fingerprint (biometric) is three times.

Most countries have migrated to chip card or chip card and PIN.

According to the RBI report, currently, only few large banks such as Citibank, ICICI Bank, HDFC Bank and SBI are issuing EMV chip cards.


(This article was published on November 28, 2013)
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