RBI asks banks to add extra security layer for phone banking

Banks will ask for an additional password from their credit card customers from the new year for any transactions conducted over phone, subsequent to a Reserve Bank direction for making phone banking more secure. As per the RBI guideline, all the banks will mandatorily decline any telephonic banking transactions, including the automated IVR (Interactive Voice Response) services, where the customers do not have a One-Time Password (OTP) for such services with effect from January 1, 2011.

However, the 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 new step has been taken as a safeguard against credit card frauds. There has been an uptick in credit card frauds where lost or stolen cards can be used by anyone.