RBI warns banks against flouting credit card security norms

RBI said that online transaction must be done in Indian currency through a bank in India

Taking exception to flouting of security norms for online transactions, Reserve Bank of India today said that the processing, including the payment for all online transactions must be done in Indian currency through a bank in India.

RBI has also said that the additional layer of security has to be maintained for all online transactions.

"It has come to our notice that despite the above clarifications there are instances of transactions being effected without the mandated additional authentication/validation even where the underlying transactions are essentially taking place between two residents in India. It is advised that entities adopting such practices leading to willful non-adherence and violation of extant instructions should immediately put a stop to such arrangements," said the RBI circular.

The notification added that the security norm has to apply even in the case when an overseas payment or gateway is involved in the transaction. These steps have been taken to make online transactions safe and were introduced after instances of fraud had come to light.