The Reserve Bank of India( RBI ) has permitted banks to issue electronic cards to natural persons having Overdraft Accounts that are only in the nature of personal loan without any specific end-use restrictions.
The card shall be issued for a period not exceeding the validity of the facility and shall also be subject to the usual rights of the banks as lenders. The electronic card for Overdraft Accounts in the nature of personal loans shall be allowed to be used for domestic transactions only.
Further, adequate checks and balances shall be put in place to ensure that the usage of such cards is restricted to facilitate online/ non-cash transactions. The restriction on cash transactions will not apply to the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
The banks should frame a Board approved policy on issuance of electronic cards before launching the product to the above-mentioned Overdraft Accounts, encompassing appropriate risk management, periodic review procedures, grievance redressal mechanism, etc.
The card should be issued subject to instructions on terms and conditions, security, grievance redressal, confidentiality of customer information as applicable for debit cards, and all other relevant instructions on card operations issued by the Reserve Bank.
Subscribe Taxscan Premium to view the Judgment
