The three new regulations that the Reserve Bank of India (RBI) has put into place to enhance cardholders’ payment options will help you. The safety requirements for cardholders have increased even more since the RBI guidelines went into effect.
From October 1, 2022, debit and credit card online payment rules will be modified by the RBI’s card-on-file (CoF) tokenization laws. It is expected that these new rules would simplify and improve cardholders’ payment options. These regulations cover the ability to set credit card limitations, tokenizing credit cards, and the need that the card issuer ask for a one-time password (OTP). To learn how they impact you, read on.

1. Permission to adjust the credit card limit:

While some cardholders may adore the concept of having their card limit automatically increased. However, did you realize that a rise in credit card limits might impact your CIBIL rating? This is because a higher credit card limit essentially indicates that you borrowed the higher limit from the bank. Your CIBIL score is negatively impacted by a greater limit. The card issuer will no longer be permitted to automatically raise the credit card limit according to the new RBI regulations that will take effect on October 1, 2022. Additionally, the cardholder must consent to any adjustment in the credit limit. Additionally, the RBI has mandated that the issuer obtain written authorization before changing the card limit.

2. Credit Card Tokenization:

In the past, websites used to save your card information, including credit and debit card numbers, names, and CVVs, for future use, but this posed a security concern. Your card information may be exposed in the event of a website hack or data breach, which might be a major issue. Card information is used by third-party payment apps to transmit funds from banks to platforms. In order to protect such transactions, the RBI has created a card tokenization system that encrypts credit card numbers. Customers’ credit card information will no longer be used for transactions by third-party payment apps as a result of the new regulations. The credit card numbers will now be converted into an encrypted token number and used for transactions. As of the first of October 2022, this regulation will be required.

3. Card issuers should request One Time Passwords (OTP):

In the past, there have been several incidents where credit cards have been activated and used without the cardholders’ knowledge. However, this won’t happen now that the new rule is in place, and the card issuer won’t be charged. The issuer will now request a one-time password (OTP) from the cardholder anytime it has been more than 30 days since the cardholder last activated it. Additionally, the credit card issuer shall deactivate the card without assessing any additional fees within seven working days if the cardholder rejects the request to activate the card.

The safety requirements have now risen further as a result of the implementation of these new Reserve Bank of India (RBI) regulations. You will benefit from these three new Reserve Bank of India (RBI) regulations since they will increase cardholders’ payment possibilities.