The RBI has spared banks for one month more to implement the one-time user password for credit card transactions over phone. Earlier this technology has to come into effect from January 1, 2011, but now RBI has now postponed the deadline to February 1 this year .
After this system comes into effect the customers would require an additional password for telephonic credit card payment. The bank would decline the transaction if the customer would not provide one-time password (OTP) after February 1 .
The system has to come into effect from January 1, but some banks expressed their inability to complete the installation process by the due date . So after consulting the officials , RBI gave extra time of one month to the banks to comply the guidelines.
The new system will check credit card frauds, as lost credit cards could be used by anyone and was an area of deep concern for the banks . Earlier the banks made it mandatory to provide an identification proof and matching of signatures for every transaction in which credit card was to be used physically, but phone and internet banking were a lot more areas of concern in term of misuse.
The proposed OTP will be valid for a single use and would remain in effect for a period of 2 hours. The customers would need to generate a separate OTP for each IVR transaction. The password will be sent only to the registered mobile number and email address of the customer.
HDFC bank said in a circular "The date of implementation (of additional password) has been revised to February 1, 2011, as advised by RBI,"
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