RBI Permits Banks to Issue Electronic Cards for Overdraft Accounts amid Lockdown

For credit/loan account holders, the facility of having a credit card of their own for day-to-day cash transactions was not a regular thing. However, in these gloomy times, the Reserve Bank of India (RBI) has given a thought about the overdraft account customers and has taken a big decision so that more and more people can get the benefit out of RBI.

Recently, RBI has permitted all the commercial banks to issue electronic cards to those people who have Overdraft Accounts that are only in the nature of personal loan without any specific end-use restrictions.

RBI has released a set of guidelines, which broadly says that the electronic card will 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.

As per reports, the electronic card can be used for domestic transactions only. This means that the international card or forex will not be issued an opposite overdraft account. The guideline also mentions that adequate checks and balances are mandatory to be put in place in order to ensure that the usage of these cards is limited to online or non-cash transactions only.

Interestingly, there would not be any limit in these electronic cards like in normal debit cards. Also, there will be no cash transaction to overdraft facility if provided along with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.

Moreover, the card will be subjected to the instructions on terms and conditions, security, grievance redressal, the confidentiality of customer information as applicable for debit cards, and all other relevant instructions on card operations issued by RBI, as per reports.