Good morning readers…..Sunshine has brought for you some information about the types of cards in use in the Indian banking system. Post demonetization this topic has gained even more importance. Hence needs to be discussed first. Here we go…..
Cards can be classified on the basis of their issuance, usage and payment by the card holder. There are three types of cards
(a) Debit cards
(b) Credit cards
(c) Prepaid cards.
DEBIT CARDS– Debit cards are issued by banks and are linked to a bank account.
Usages of debit cards
The debit cards are used to withdraw cash from an ATM, purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) both domestically and internationally (provided it is enabled for international use). However, it can be used only for domestic fund transfer from one person to another.
CREDIT CARDS– Credit cards are issued by banks / other entities approved by RBI. The credit limits sanctioned to a card holder is in the form of a revolving line of credit (similar to a loan sanctioned by the issuer) and may or may not be linked to a bank account.
Usages of credit cards
The credit cards are used for purchase of goods and services at Point of Sale (POS) and E-commerce (online purchase)/ through Interactive Voice Response (IVR)/Recurring transactions/ Mail Order Telephone Order (MOTO). These cards can be used domestically and internationally (provided it is enabled for international use). The credit cards can be used to withdraw cash from an ATM and for transferring funds to bank accounts, debit cards, credit cards and prepaid cards within the country.
PREPAID CARDS– Prepaid cards are issued by the banks / non-banks against the value paid in advance by the cardholder and stored in such cards which can be issued as smart cards or chip cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers, etc.
Usages of prepaid cards?
The usage of prepaid cards depends on who has issued these cards. The prepaid cards issued by the banks can be used to withdraw cash from an ATM, purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) and for domestic fund transfer from one person to another. Such prepaid cards are known as open system prepaid cards. However, the prepaid cards issued by authorized non-bank entities can be used only for purchase of goods and services at Point of Sale (POS)/E-commerce (online purchase) and for domestic fund transfer from one person to another. Such prepaid cards are known as semi-closed system prepaid cards. These cards can be used only domestically. The maximum value that can be stored in any prepaid card (issued by banks and authorised non-bank entities) at any point of time is Rs 50,000/-.
SOME COMMONLY ASKED QUESTIONS
- Who decides the limits on cash withdrawal or purchase of goods and services through use of a card?
Ans: The limits on cash withdrawal at ATMs and for purchase of goods and services are decided by the issuer bank. However, in case of cash withdrawal at other bank’s ATM, there is a limit of Rs 10,000/- per transaction. Cash withdrawal at POS has also been enabled by certain banks wherein, a maximum of Rs.1000/- can be withdrawn daily by using debit cards.
2. Is the customer charged by his/her bank when he uses his debit card at other banks ATM for withdrawing cash?
Ans: As per extant instructions, the savings bank account customer will not be charged by his/her bank up to five transactions (inclusive of both financial and non-financial transactions) in a month if he/she uses an ATM of another bank. However, within this overall limit of five free transactions, for transactions done at ATM of another bank located in the six metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, the free transaction limit is set to three transactions per month.
3. Where should the customer lodge a complaint in the event of a failed ATM transaction (account debited but cash not dispensed at the ATM)?
Ans: The customer has to approach his/her bank (bank that issued the card) to lodge a complaint in the event of a failed ATM transaction.
4. What is the time limit for resolution of the complaint pertaining to failed ATM transaction?
Ans: The time limit, for resolution of customer complaints by the issuing banks, is within 7 working days from the date of receipt of customer complaint. Hence the bank is supposed to re-credit the customer’s account within 7 working days. For failure to re-credit the customer’s account within 7 working days of receipt of the complaint from the customer, the bank is liable to pay Rs 100 per day as compensation to the customer.
5. What is the option for a card holder if his complaint is not redressed by the issuer?
Ans: If a complainant does not get satisfactory response from his/her bank within a maximum period of thirty (30) days from the date of his lodging the complaint, he/she will have the option to approach the Office of the Banking Ombudsman (in appropriate jurisdiction) for redressal of his grievance.