The ATM fraud in the city in which lakhs of rupees were siphoned off from the bank accounts of many persons could force banks to expedite the process of switching over from the magnetic stripe-based ATM and debit cards to the EMV chip and PIN-based model to protect against cloning, skimming and other frauds.
On May 26, 2016, the Reserve Bank of India had issued a notification directing banks and white label ATM operators to equip their ATM machines for processing of chip-based cards to ensure the safety and security of transactions. The central bank also set a deadline of September 30, 2017 to migrate to the chip- based card system.
SBT has already equipped its entire ATM network to handle chip-based cards. The bank has also started issuing EMV chip and PIN cards to customers and hope to complete the process by next year, officials said.
New cards
From December 1, 2015 all new cards issued by the State Bank Group are chip-based.
Unlike magnetic strip-based cards which store the account information in tiny magnets for retrieval by an electronic data capture machine, chip- based cards carry the data in encrypted format, making it far less vulnerable to frauds. Once a fraudster skims a magnetic strip based card, he can create a cloned card with the account holder’s details and use it.
However banking sources said the elimination of frauds like skimming would depend on the standard of encryption employed by banks for chip- based cards.
