On December 14th, 2020, RBI has introduced a set of new regulations that are going to be effective in the upcoming events. Yet, again they have exempted a few current account rules. RBI claimed that the recent change will be effective from 15th December onwards.
What are RBI’s new rules in 2020?
RBI has introduced a new set of rules in a way to provide strong security and convenient card transaction. As far as people know, nowadays, frauds have become a familiar act. Therefore, RBI directed all banks to not give international facilities to customers’ cards unless the customer demands it. Finally, here are the new rules you need to keep in mind.
- As revealed by RBI, all new credit and debit cards issued by the respective banks will only work for domestic transactions at ATMs and point of sale terminals(POS: systems that enable the business transaction between client and company).
- In addition to benefits for the debit card and credit card users, now it allows them to set up their own transaction limits too.
- Undoubtedly, each credit card user will have an alternative to opt-in or not regarding the services on their credit or debit cards such as online transactions, international transactions, and contactless transactions.
- All the banks are assigning to disable online payments for all those debit and credit cards which have never been used for online or contactless transactions.
- Also informed customers that it is not necessary to swipe their credit or debit cards in the point of sale terminal, under the banks that have issued cards based on Near Field Communication technology.
- The new guidelines are publishing under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
Benefits of RBI’s new rules 2020?
- It is implemented to strengthen credit discipline.
- Moreover, it reduces the frauds act
- On the other hand, these accounts don’t apply interest.
- Best to store cash for short-term businesses.
- Credit lenders between five to fifty crores INR can open a current account; nevertheless, non-lending banks can only open a collectin account.
- For above 50 crores INR, introducing escrows, to open the bank’s current account for the borrower.
What are the exemptions to new regulation 2020?
- Homebuyers’ 70% advance payment on the real estate projects are noted in the exempted rules.
- Accounts with tax, duties, statutory dues discharging, are considering into the exempted rules.
- Third-party accounts of payment aggregators or prepaid payment instruments will look after.
- In the case of FEMA 1999 sanctioned statements, they are remarking a point in the new release.
- Moreover, debit cards, or ATM cards, or credit card issuers’ dues settlement are in the count.
- Accounts associated with IPO or NFO or FPO or share buyback, dividend payment, or insurance of commercial papers or allotment of debentures or gratuity are exempted.
- Accounts of white label ATM operators and their agents for sourcing of currency are looking into.