What changed
RBI received representations from banks and system providers citing operational difficulties in implementing the MDR directive by the original deadline. In response, RBI granted an extension until end of August 2012, making the new MDR scheme operational from September 1, 2012.
What it means for you
Banks and card payment networks get a two-month reprieve to modify their computer systems and renegotiate merchant agreements without penalty. This ensures smoother rollout of the new MDR structure, reducing compliance risk for lenders. However, the final deadline is now fixed, so preparation must be completed by September 1.
What you must do
- Update internal systems to support the new MDR rates for debit card transactions by August 31, 2012.
- Revise merchant agreements to reflect the revised MDR structure before the September 1 deadline.
- Acknowledge receipt of this circular and ensure compliance.
- Coordinate with card payment networks to ensure seamless implementation across all channels.
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Authorised Card Payment Networks
Why did RBI extend the MDR deadline?
Banks and system providers reported operational difficulties, including the need for computer system modifications and changes to merchant agreements, which required additional time.
What is the new effective date for the MDR scheme?
The scheme will become operational from September 1, 2012, replacing the earlier deadline of June 28, 2012.
Under which legal provision was this directive issued?
This directive was issued under Section 18 of the Payment and Settlement Systems Act, 2007.