RBI asks banks to upgrade ATMs to prevent cloning of debit and credit cards

RBI on Thursday asked banks to upgrade all ATMs by September 2017 with additional safety measures to prevent skimming and cloning of debit and credit cards.

The Reserve Bank noted that while the POS terminal infrastructure in the country has been enabled to accept and process EMV Chip and PIN cards, the ATM infrastructure, on the whole, continues to process the card transactions based on data from the magnetic stripe.

"As a result, the ATM card transactions remain vulnerable to skimming, cloning, etc frauds, even though the cards are EMV Chip and PIN based. It has, therefore, become necessary to mandate EMV Chip and PIN card acceptance and processing at ATMs also," the RBI said.

Contact Chip processing of EMV Chip and PIN cards at ATMs would not only enhance the safety and security of transactions at ATMs but also facilitate preparedness of the banks for the proposed 'EMV Liability Shift' for ATM transactions, as and when it comes into effect, it said.

"Banks in India and the White Label ATM operators are, therefore, advised to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by September 30, 2017," RBI said in a notification.

Also, all new ATMs should necessarily be enabled for EMV Chip and PIN processing from inception. For the purpose of switching, clearing and settlement of their ATM transactions, banks with the approval of their Board, may join any authorised ATM/Card network provider, the RBI added.

Further, in order to ensure uniformity in card payments ecosystem, "Banks shall also implement the above requirements at their micro-ATMs which are enabled to handle card-based payments", it added.

In another notification, RBI said in order to encourage banks to expand card acceptance infrastructure, banks can put in place their own Board approved policy on merchant acquisition.