From Reserve Bank of India,
"All new debit and credit cards to be issued only for domestic usage unless international use is specifically sought by the customer. Such cards enabling international usage will have to be essentially EMV Chip and Pin enabled. (By June 30, 2013)
Issuing banks should convert all existing MagStripe cards to EMV Chip card for all customers who have used their cards internationally at least once (for/through e- commerce/ATM/POS) (By June 30, 2013)"
EMV(Europay Mastercard Visa) chip Credit/Debit cards have IC chips in them unlike the current Magnetic strip cards. The main reason for replacing them is to reduce the fraudulent usage by authenticating the chip during purchase. It is easy to duplicate a magnetic strip card.
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Users who need to use the card for International purchases should replace old one with EMV chip card. Go to your bank's home branch and fill the printed requisition form with following details
- Card Number, Expiry date
- Account Number
- Specify cash limitation for ATM transactions, Point of Sale(POS), E-Commerce
- Validity - from and to date (for International transactions)
The maximum limit for ATM transaction is INR 50,000 INR, POS - INR 70,000 and E-Commerce - INR 50,000. You can specify the limit within this RANGE only. You should also say a reason for International purchases(for namesake).
Although RBI has announced it by February 28, most of the banks haven't taken any steps in replacing the card until now. It will take few weeks to receive the new EMV card. Until then, you can use the existing card for domestic transaction.
Update(02 Aug, 2013):
Many banks(KVB, Indian Bank, UTI and many others) including customer care/support are not aware of the EMV Chip card. Customer care will say, It is International Credit/Debit card only. But what it actually means is,
An international transaction is one if a debit/credit card has been used in a foreign market and e-commerce transactions does not constitute an international transaction.