Mumbai: The Reserve Bank of India (RBI) has allowed scheduled commercial 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 said the central bank in a circular. “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 or non-cash transactions,” noted the RBI in a circular.
Having said that, the restriction on cash transactions will not apply to overdraft facility which is provided along with Pradhan Mantri Jan Dhan Yojana accounts. Further, banks are also required to frame a Board approved policy in issuance of electronic cards to the overdraft accounts, prior to the launching of the product. Certain criteria including appropriate risk management, periodic review procedures, grievance redressal mechanism and so on will be subject to supervisory review. “The card shall 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,” confirmed the country’s apex bank.