Banks are not following the Reserve Bank of India (RBI) directive to make the automated teller machines (ATMs) and Point of Sale (POS) devices compliant to EMV chip (Europay, Mastercard & Visa), which would make digital transactions much safer. As result, the RBI is forced to extend the deadline time and again.

In order to ensure that customers are protected from theft of data or money, the RBI, in May 2016, had asked all banks to ensure that their ATMs are able to process the EMV chip and PIN transaction by 30 September 2017, by migrating from the existing magnetic stripe cards, which is vulnerable to cloning and skimming.

However, most banks have failed to make their ATMs EMV compliant till now, forcing the Central bank to extend the time limit once again. Now, the banks have been given the deadline of December 2018 to make ATMs/POS as well as cards EMV compliant.

There are 2.35 lakh ATMs across the country. Most of the banks, barring some private ones, have not started the process in this regard. As a result of this delay, ATM frauds are increasing day by day. A large number of foreign nationals are now into ATM frauds in the country. Recently, the Delhi Police arrested four Romanians for allegedly cheating people by cloning their ATM cards. Similar cases of foreigners being involved in ATM frauds are coming in regularly from different parts of the country, especially metropolitan cities like Delhi, Mumbai, Pune, Hyderabad, Bengaluru etc.

“The RBI has been pushing for making ATMs EMV chips and PIN cards. In May 2015, the RBI had issued a notification asking banks to make sure that all cards issued on or after 1 September 2015 have EMV chip and PIN cards. Many banks asked for an extension of time to meet the directive and were given time till 31 January 2016. However, the banks failed to comply with the directive. In May 2016, the deadline was extended to September 2017. The deadline has now again been extended to December 2018,” said a source. The EMV chip and PIN technology, unlike the magnetic stripe technology, enables dynamic authentication, and, therefore, mitigates the risk of data theft, as card thieves can easily duplicate cards with a magnetic stripe using simple card reading devices. Many Point of Sale (POS) devices across the country are now using this technology. That is the reason why the card, in many cases, need not be swiped any more but only partially inserted from the bottom of the device.

“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,” the RBI said in a notification in May 2016. “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,” the RBI had said in the notification.

 

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