May 26, 2016
The Chairman and Managing Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks /
State Co-operative Banks / District Central Co-operative Banks/ Authorised ATM Network Operators /
Card Payment Network Operators/White Label ATM Operators
Madam / Sir,
ATMs - Security and Risk Mitigation Measures for Card Present (CP) Transactions
Please refer to our circular RBI/2014-15/589 DPSS(CO) PD.CO.No.2112 / 02.14.003 / 2014-2015 dated May 07,2015 and RBI/2015-16/163 DPSS CO.PD.No.448/02.14.003/2015-16 dated August 27, 2015 advising banks regarding the timelines for migrating from magnetic stripe cards to issuance of EMV Chip and PIN based cards.
2. While the POS terminal infrastructure in the country has been enabled to accept and process EMV Chip and PIN cards, the ATM infrastructure, on the whole, continues to process the card transactions based on data from the magnetic stripe. As a result, the ATM card transactions remain vulnerable to skimming, cloning, etc. frauds, even though the cards are EMV Chip and PIN based. It has, therefore, become necessary to mandate EMV Chip and PIN card acceptance and processing at ATMs also. Contact Chip processing of EMV Chip and PIN cards at ATMs would not only enhance the safety and security of transactions at ATMs but also facilitate preparedness of the banks for the proposed “EMV Liability Shift” for ATM transactions, as and when it comes into effect.
3. Banks in India and the White Label ATM operators are, therefore, advised to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by September 30, 2017. All new ATMs shall necessarily be enabled for EMV Chip and PIN processing from inception. For the purpose of switching, clearing and settlement of their ATM transactions banks, with the approval of their Board, may join any authorised ATM/Card network provider.
4. Further, in order to ensure uniformity in card payments ecosystem, banks shall also implement the above requirements at their micro-ATMs which are enabled to handle card-based payments.
5. A quarterly progress report should be sent the Chief General Manager, Reserve Bank of India, Department of Payment and Settlement System, Central Office, Mumbai in the appended format for the quarter ending June/Sept/Dec/March by 15th of the month following the quarter end.
6. This directive is issued under section 10(2) read with section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).
(Nanda S. Dave)
Chief General Manager