New Delhi: Senior law enforcement officers pointed out how banks are violating the Reserve Bank of India’s (RBI) guidelines regarding making EMV chip-enabled debit cards mandatory.
Senior officers have highlighted that banks are still storing customers’ data in the magnetic strips instead of storing it into EMV chips. Data stored on magnetic strips can be easily cloned while EMV chip technology is more secured.
“Beware! Your EMV chip-enabled debit card can still be cloned easily as many ATM machines are still not EMV chip ready inspite of RBI mandate that they must be from January 1, 2019,” wrote Dr Muktesh Chander, senior IPS officer and former director of the National Critical Information Infrastructure Protection Centre
The officer who is deployed as Special Commissioner of Police (Operations) further added, “My Axis Bank card worked even after covering the chip with tape.” He marked National Payments Corporation of India (NPCI) and the bank highlighting the loophole.
According to the Reserve Bank of India (RBI) guidelines, all Indian banks needed to replace the magnetic debit card of their customers with a new EMV card by December 31, 2018.
The move by RBI came in view of the continuing online frauds by cloning data stored on magnetic stripe debit cards. RBI n its website has said banks have been instructed to convert all existing Magnetic Stripe cards to EMV Chip & PIN cards before December 31, 2018. If the card holder has not got his / her magnetic stripe card replaced by an EMV Chip & PIN card, he / she should immediately approach his / her bank branch to get the replacement.
What is EMV chip technology?
The EMV technology – Europay, Mastercard and Visa is a globally accepted standard for debit card payments. The EMV chip-enabled debit cards come laden with an embedded microprocessor chip that stores and safeguards cardholder’s data. The EMV technology is safe and secure when compared to Magstripe versions of the ATM-cum-Debit cards.
Explaining the loophole of storing data on the magnetic strip and not enforcing chip-based card, Harshvardhan Singh, co-founder, Future Crime Research Foundation (FCRF) said “RBI has mandated all the banks to have chips in the card to avoid the increasing cases of cloning. Still, all the card details are being stored in the magnetic strip. It dilutes the whole purpose of spending so much money to replace existing cards with chip-enabled cards. Banks need to answer why they are still storing data in magnetic strips. Card cloning has caused huge financial damage to the bankings sector and after all, the common man is suffering.”
Harshvardhan added that cybercriminals have bought card readers and writers for less than Rs 20,000 from popular online shopping websites to steal bank customers data.
“These gadgets are easily available on online shopping portal and YouTube is flooded with tutorials for such scam. The Best way to stay safe is by being aware and cautious. Banks must strictly enforce chip-based cards immediately. The Finance Ministry and RBI must hold banks responsible in case of card-cloning for their negligent attitude,” Harshvardhan said.
Other banking experts told The420 storing data in magnetic strips is non-compliance of the regulator. Both the RBI and Finance Ministry should pull up the banks for violating licensing terms and condition. They must also find out why banks continued to issue and store data in a magnetic strip even after the deadline. In case of card cloning fraud without any investigation banks should return the money to their customers.
Experts also said the banks must immediately replace all the ATM with the latest technology which must accept only EMV enabled cards.