Reserve Bank Of India has taken cognisance of the fact that credit cards need to be more secure in the hands of the users to ensure that their misuse and frauds are minimised if not eliminated completely. RBI has taken whole host of steps in this year to make banking an easier and user friendly process. Some of the most recent steps include the removal of ATM transaction fee charged by the banks in case the customer removed money from non-bank ATM. Some other steps include making provision for calculating interest on savings account on daily balance basis as against the current provision of paying interest on monthly average balance in savings account.
Now RBI has mandated that from 1st August 2009, all the banks need to provide another security code to each of its credit card users in addition to the credit card number, CVV etc which the banks already provide. This extra code is meant to be made available to the user directly and wont be on the card. This is significant since currently a card can be used by anyone since all the required information to use the credit card is already mentioned on the card. One needs to know the credit card number, expiry date and CVV number in order to be able to use the card. All the three information is printed on the card itself. So , once a person flicks a card from the user, he/she can easily misuse it.
Now with this extra code , the chances of this misuse will be greatly minimised as one will need an extra security code in order to be able to use the card . This security code will only be there with the genuine user of the card. The banks still need to finalise the technology that they will use in order to make this a reality , but , the bottom line is that the credit cards are set to become much more secure.
So after 1st Aug 2009, you can afford to be little more relaxed while paying your restaurant bills or petrol bills by your credit card. This will go a long way in reducing the losses of the banks as well since most of the outstanding on cards due to credit card misuse or frauds end up becoming NPAs and are finally written off by the banks. So its a win-win for both the bank and the credit card user.