Amid reports of growing number of misuse of cards, the Reserve Bank on Thursday pitched for uniform security architecture for electronic banking across nations to check credit card frauds.
New Delhi: Amid reports of growing number of misuse of cards, the Reserve Bank on Thursday pitched for uniform security architecture for electronic banking across nations to check credit card frauds.
"There is also strong case for uniform security standard across the jurisdictions for minimising frauds in electronic banking," RBI Deputy Governor H R Khan said at a function here.
"A case in point is frauds relating to misuse of international credit cards due to the absence of the requirement of second factor authentication for all the Card Not Present (CNP) transactions," he said while inaugurating infrastructure seminar on Principles for Financial Market Infrastructures and Innovations in Retail Payment Systems.
He stated that the regulators need to play an active role in encouraging entities to put in place various standards and leveraging them for business growth and risk management.
The observation by the Deputy Governor assumes significance as there has been a large number of credit card frauds that has come to light.
Stating that cost effective does not necessarily mean providing services at lower cost to consumers, Khan said it has to be cost effective for the system and the service providers too.
"It has always been a debate who should set the price, i.E., regulators or market. Although it sounds good to leave the cost aspect to markets, it is not always true, particularly in developing countries with high rate of financial illiteracy and where payment systems are still evolving," he said.
In the Indian context, he said, it is the regulator that often takes various initiatives to develop the payment systems and sometime even the products.
For example recently RBI has reduced interchange fees for use of debit cards to promote card based transactions which have not taken off in a big way although the number of cards issued is significant, he added.