RBI guidelines to overcome the online banking frauds


The banking frauds has become a common phenomenon especially after the advent of Information Technology in 2000 especially after the introduction of ATMs, Credit and Debit cards.


These frauds increased manifold during the last two years which is anywhere between Rs.71,455 crore in 2018-19 and Rs.1,85,644 crore in 2019-20. This includes a fraudulent transaction by corporate people. But the general public has also lost huge money running into hundreds of crores apart from bank staff frauds by colluding with unscrupulous persons.

Though banks have been cautioning its customers not to reveal their pin numbers of their debit or credit cards to any outsiders online, still people continued to be duped by these fraudsters in many ways.

The Reserve Bank of India (RBI) has made the following few observation as mentioned below:

Generally while issuing a Debit card or Credit card bank staff link it to
A) all ATM transaction
B) All Point of Sales ( shops & malls)
C) All online transaction
D) All foreign countries transaction

Since the banks have not fixed any sealing on the usage or withdrawal limits on Credit or Debit Cards. For example, a customer can use his card up to Rs.50,000 only as limit per transaction is fixed, then fraud can not be done in more than that amount. Although some of the foreign banks have fixed the customer limit of usage on his/her cards, variation is not permitted by the customer. Bank only can change the limit.

Now RBI declared some guidelines.

  • RBI observed that though Online Transaction permitted for all Cards only 15% of the customers are using it. So they can go to their bank and inform them to disconnect this facility to avoid frauds.
  • Similarly, those cardholders who are not using Foreign transactions (hardly 2% are using) also can cancel the Foreign Transaction permitted clause.
  • The limit can be fixed for Card usage by all customers from their Mobile Apps or in bank branches to reduce the frauds.
  • Whenever Online purchase is done customers are advised to change the password.
  • Limits can be also fixed for all Cards and varied also 24×7 hours on all days.
  • For using in Point of sale also in all shops and malls customers are advised to fix the limit as per requirement only.

The main intention of RBI is to minimise the amount in frauds and drastically reduce frauds on all Cards.