What changed
RBI superseded earlier circulars from 1999-2004 with a consolidated set of guidelines. Banks now have general permission to issue co-branded debit cards and rupee-denominated prepaid instruments without seeking prior RBI approval, subject to conditions. Offline debit cards are banned; existing ones must be discontinued within six months.
What it means for you
Banks gain operational flexibility to partner with co-branding entities without case-by-case RBI approval, speeding up product launches. The offline debit card ban pushes all transactions to online, real-time debit, enhancing security and reducing settlement risks. Banks must update board-approved policies and ensure KYC/AML compliance for all card programs.
What you must do
- Formulate or update a board-approved debit card issuance policy covering co-branded cards.
- Phase out all offline debit cards within six months and inform customers about switching to online cards.
- Send confirmation of offline card discontinuation to RBI's Department of Banking Operations and Development.
- Ensure KYC/AML/CFT compliance for all debit cards, including co-branded ones.
- Stop issuing unsolicited cards; only send replacements for existing cards.
Who it affects
All scheduled commercial banks (excluding RRBs), Debit card issuing departments, Compliance and risk management teams, Product and partnership teams handling co-branded cards
Can we issue co-branded debit cards without RBI approval now?
Yes, RBI has granted general permission for co-branded debit cards and rupee-denominated prepaid instruments, provided you follow the guidelines in the annex and have a board-approved policy.
What is the deadline to stop offline debit cards?
You must discontinue issuing and operating offline debit cards within six months from December 12, 2012. A review and confirmation of discontinuation must be sent to RBI.
Are cash credit or loan account holders eligible for debit cards?
No, debit cards can only be issued to savings bank or current account holders, not to cash credit or loan account holders.