Banks to bear card fraud cost in absence of security features

Mumbai: Refusing to give further extension to banks for complying with security norms, the RBI said that banks will have to bear the cost of fraudulent card transaction through point of sales that do not have prescribed security features. "It has been decided not to grant any further extension of time. Accordingly, banks not complying with the requirements shall compensate loss, if any, incurred by the card holder using card at POS (points of sale) terminals not adhering to the mandated standards," RBI said in a notification. In this context, it said, since the card holder would be approaching the card issuing bank for any fraudulent POS transaction in India which have occurred after September 30, 2013), the bank should claim the amount paid by it to the customer from the respective bank which have acquired the POS transaction in question. The card issuing bank would ascertain, within three working days from the date of card holder approaching the bank, whether the respective POS terminal where the said transaction occurred is compliant with mandated security features, it said. In the event it is found that the POS terminals are non-compliant as mandated, it said, the issuing bank shall pay the disputed amount to the customer within seven working days, failing which a compensation of Rs 100 per day will be payable to the customer from the eighth working day.