Q. No. 1: How many types of cards are available to a customer?
Ans: Cards can be classified on the basis of their issuance, usage and payment by the card holder. There are three types of cards (a) debit cards (b) credit cards and (c) prepaid cards.
Q. No. 2: Who issues these cards?
Ans: Debit cards are issued by banks and are linked to a bank account. Credit cards are issued by banks / other entities approved by RBI. The credit limits sanctioned to a card holder is in the form of a revolving line of credit (similar to a loan sanctioned by the issuer) and may or may not be linked to a bank account. Prepaid cards are issued by the banks / non-banks against the value paid in advance by the cardholder and stored in such cards which can be issued as smart cards or chip cards, magnetic stripe cards, internet accounts, internet wallets,mobile accounts, mobile wallets, paper vouchers, etc.
Q. No. 3: What are the usages of debit cards?
Ans: The debit cards are used to withdraw cash from an ATM, purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) both domestically and internationally (provided it is enabled for international use). However, it can be used only for domestic fund transfer from one person to another.
Q. No. 4: What are the usages of credit cards?
Ans: The credit cards are used for purchase of goods and services at Point of Sale (POS) and E-commerce (online purchase)/ through Interactive Voice Response (IVR)/Recurring transactions/ Mail Order Telephone Order (MOTO). These cards can be used domestically and internationally (provided it is enabled for international use). The credit cards can be used to withdraw cash from an ATM and for transferring funds to bank accounts, debit cards, credit cards and prepaid cards within the country.
Q. No. 5: What are the usages of prepaid cards?
Ans: The usage of prepaid cards depends on who has issued these cards. The prepaid cards issued by the banks can be used to withdraw cash from an ATM, purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) and for domestic fund transfer from one person to another. Such prepaid cards are known as open system prepaid cards. However, the prepaid cards issued by authorised non-bank entities can be used only for purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) and for domestic fund transfer from one person to another. Such prepaid cards are known as semi-closed system prepaid cards. These cards can be used only domestically.
Q. No. 6: Is there any limit on the value stored in a prepaid card?
Ans: Yes, as per extant instructions, the maximum value that can be stored in any prepaid card (issued by banks and authorised non-bank entities) at any point of time is Rs 50,000/-
Q. No. 7: Can prepaid cards of lesser limits be issued?
Ans: Yes. The following types of semi closed pre-paid payment instruments can be issued by carrying out Customer Due Diligence as detailed by the banks and authorised non- bank entities:
a. Up to Rs.10,000/- by accepting minimum details of the customer provided the amount outstanding at any point of time does not exceed Rs 10,000/- and the total value of reloads during any given month also does not exceed Rs 10,000/-. These can be issued only in electronic form;
b. from Rs.10,001/- to Rs.50,000/- by accepting any ‘officially valid document’ defined under Rule 2(d) of the PML Rules 2005, as amended from time to time. Such PPIs can be issued only in electronic form and should be non-reloadable in nature;
c. up to Rs.50,000/- with full KYC and can be reloadable in nature. The balance in the PPI should not exceed Rs.50,000/- at any point of time.
Q. No. 8: Who decides the limits on cash withdrawal or purchase of goods and services through use of a card?
Ans: The limits on cash withdrawal at ATMs and for purchase of goods and services are decided by the issuer bank. However, in case of cash withdrawal at other bank’s ATM, there is a limit of Rs 10,000/- per transaction. Cash withdrawal at POS has also been enabled by certain banks wherein, a maximum of Rs.1000/- can be withdrawn daily by using debit cards.
Q. No.9: Is the customer charged by his/her bank when he uses his debit card at other banks ATM for withdrawing cash?
Ans: As per extant instructions, the savings bank account customer will not be charged by his/her bank up to five transactions (inclusive of both financial and non-financial transactions) in a month if he/she uses an ATM of another bank. However, within this overall limit of five free transactions, for transactions done at ATM of another bank located in the six metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, the free transaction limit is set to three transactions per month.
Q. No.10: Where should the customer lodge a complaint in the event of a failed ATM transaction (account debited but cash not dispensed at the ATM)?
Ans: The customer has to approach his/her bank (bank that issued the card) to lodge a complaint in the event of a failed ATM transaction.
Q. No.11: What is the time limit for resolution of the complaint pertaining to failed ATM transaction?
Ans: The time limit, for resolution of customer complaints by the issuing banks, is within 7 working days from the date of receipt of customer complaint. Hence the bank is supposed to re-credit the customer’s account within 7 working days. For failure to re-credit the customer’s account within 7 working days of receipt of the complaint from the customer, the bank is liable to pay Rs 100 per day as compensation to the customer.
Q. No. 12: What is the option for a card holder if his complaint is not redressed by the issuer?
Ans: If a complainant does not get satisfactory response from his/her bank within a maximum period of thirty (30) days from the date of his lodging the complaint, he/she will have the option to approach the Office of the Banking Ombudsman (in appropriate jurisdiction) for redressal of his grievance.
Q. No. 13: How are the transactions carried out through cards protected against fraudulent usage?
Ans: For carrying out any transactions at an ATM, the card holder has to key in the PIN which is known only to him/her for debit/credit and prepaid cards. However, for carrying out transactions at POS too, the card holder has to key-in the PIN which is known only to the card holder if a debit card is used. In the case of credit card usage at POS the requirement of PIN depends on the banks policy on security and risk mitigation. In the case of e-commerce transactions, additional factor of authentication is applicable except in case of international websites.
Q. No. 14: What are the liabilities of a bank in case of fraudulent use of a card by unauthorised person?
Ans: In case of card not present transactions RBI has mandated providing additional factor of authentication (if the issuer bank and e-commerce merchant bank is in India). Hence, if a transaction has taken place without the additional factor of authentication and the customer has complained that the transaction is not effected by her/him, then the issuer bank shall reimburse the loss to the customer without demur.
Q. No. 15: Is there anyway a customer can come to know quickly whether a fraudulent transaction has taken place using his/her card?
Ans: RBI has been taking various steps to ensure that card payment environment is safe and secure. RBI has mandated banks to send online alerts for all card transactions so that a card holder is aware of transactions taking place on his / her card.
Q No. 16: What is the mandate for banks for issuing Magnetic stripe cards or Chip-based cards?
Ans: RBI has mandated that banks may issue new debit and credit cards only for domestic usage unless international use is specifically sought by the customer. Such cards enabling international usage will have to be essentially EMV Chip and Pin enabled. The banks have also been instructed to convert all existing Mag-stripe cards to EMV Chip card for all customers who have used their cards internationally at least once (for/through e- commerce/ATM/POS).
Updated on 16/06/2014
1. What happens if there are delays in cheque clearing?
Local Cheques
Local cheques are payable within the jurisdiction of the clearing house and will be presented through the clearing system prevailing at the centre. Credit arising out of local cheques shall be given to the customer’s account at the next day to the date of presentation in the clearing. Ideally, banks shall permit usage of the shadow credit afforded to the customer accounts immediately after closure of the relative return clearing on the next working day or maximum within an hour of commencement of business on the third working day from the day of presentation in clearing, subject to usual safeguards. If there is any delay in credit, beyond the period specified above, customer is entitled to receive compensation at the rate specified in the Cheque Collection Policy (CCP) of the concerned bank. In case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate has to be paid for the corresponding period of delay.
Outstation Cheques
Maximum timeframe for collection of cheques drawn on state capitals/major cities/other locations are 7/10/14 days respectively. If there is any delay in collection beyond this period, customer is entitled to receive compensation at the rate specified in the Cheque Collection Policy (CCP) of the concerned bank. In case the rate is not specified in the CCP, interest rate on Fixed Deposits for the corresponding maturity to be paid. Banks' cheque collection policy also indicates the limit up to which outstation cheques are given immediate/instant credit.
2. What happens if cheques / instruments are lost in transit / in clearing process?
Ans: If cheques are lost in transit or in the clearing process or at the paying bank's branch, the bank should immediately bring the same to presenting customer (beneficiary)’s notice so that the customer can inform the drawer to record stop payment and can also take care that other cheques issued anticipating the credit arising out of the lost cheque are not dishonoured due to non-credit of the amount of the lost cheques / instruments.
The onus of such loss of instrument lies with the collecting banker.
The customer is entitled to be reimbursed by banks for related expenses for obtaining duplicate instruments and also interest for reasonable delays in obtaining the same.
3. My bank charges me a large sum of money for cheque collection. Is there any remedy?
Ans: Local Cheque collection charges are decided by the concerned bank from time to time and communicated to customer through their Cheque Collection Policy as part of the Code of Bank’s Commitment to Customers. Banks cannot charge more than the following for outstation cheques:
Up to and including `5000 – `25 per instrument + service tax; Above `5000 and Up to and including `10,000 – not exceeding`50 per instrument+ service tax; Above `10,000 and up to and including `1, 00,000 – not exceeding `100 per instrument + service tax; `1, 00,001 and above – left to the banks to decide. No additional charges such as courier charges, out of pocket expenses, etc., should be levied.
4. My bank refuses to accept outstation cheques for collection. Is there any remedy?
Ans: No bank can refuse to accept outstation cheques deposited for collection or refuse to offer its products to customers.
5. Can I know a bank’s Cheque Collection Policy?
Like in most countries, banks in India also are required to develop their own individual policy / procedures relating to collection of cheques. The customer is entitled to receive due disclosures from the bank on the bank's obligations and the customers' rights.
Broadly, the policies formulated by banks should cover the following areas:
Immediate credit for local/outstation cheques, Time frame for collection of local/ outstation instruments and compensation payable for delayed collection.
The cheque collection policies of various banks are made available on the website of respective bank.
Banks are obliged to disclose their liability to customers by way of compensation/interest payments due to delays for non-compliance with the standards set by the banks themselves. The customer has to be compensated by way of compensation/interest payment even if no formal claim is lodged to the effect.
6. How are bank’s supposed to disclose their policies?
Ans: Customer have the right to know the Cheque Collection Policy of the bank before entering into any transaction.
The bank is obliged to disclose the amount up to which immediate credit of outstation cheque is offered in its Comprehensive Notice Board, which is to be displayed at each and every branch of the bank. The bank is also required to disclose time frame for collection of local/outstation instruments and policy for compensation payable for delayed collection. The same will be available in the Information Booklets which should be available at all the bank branches. The customer is also entitled to receive a copy of the bank’s Cheque Collection Policy, if he/she so desire. Banks are also required to put up their Cheque Collection Policy on their websites.
7. What are the other means of transfer of funds?
They are RTGS (Real Time Gross Settlement) & NEFT (National Electronic Fund Transfer). For more details visit the FAQs on RTGS under the link http://rbi.org.in/scripts/FAQView.aspx?Id=65 and NEFT under the linkhttp://rbi.org.in/scripts/FAQView.aspx?Id=60.
In addition to the above, Immediate Payment Service (IMPS) is offered by National Payments Corporation of India (NPCI). For more details the website of NPCI under the link http://www.npci.org.in/imps_product.aspx may be visited.
8. Am I entitled to receive an acknowledgement for cheque deposited in a bank for collection?
Banks are required to provide both the cheque drop box facility and the acknowledgement facility at their collection counters. No bank branch can refuse to give an acknowledgement to the customer if the latter asks for the same while tendering cheque for collection at the bank branch’s counter.
9. What do I do if I still have a grievance?
If any customer has a complaint against a bank due to non-payment or inordinate delay in the payment or collection of cheques, complaint can be lodged with the bank concerned. If the bank fails to respond within 30 days, a complaint with the Banking Ombudsman may be lodged. (Please note that complaints pending in any other judicial forum will not be entertained by the Banking Ombudsman). No fee is levied by the office of the Banking Ombudsman for resolving the customer’s complaint. A unique complaint identification number will be given for tracking purpose.
Complaints have to be addressed to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located. Complaints can be lodged simply by writing on a plain paper or online atwww.bankingombudsman.rbi.org.in or by sending an email to the concerned Banking Ombudsman. Complaint forms are available at all bank branches also.
Complaint can also be lodged by authorised representative (other than a lawyer) or by a consumer association/forum acting on customer's behalf. If the complainant is not satisfied with the decision of the Banking Ombudsman, an appeal can be made to the appellate authority in the Reserve Bank of India (Deputy Governor of Reserve Bank of India in charge of Customer Service Department)
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