The move is aimed at curbing the risk of data theft resulting from the usage of the magnetic stripe technology in ATM cards.
The central bank said: "Banks in India and the White Label ATM operators are, therefore, advised to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by September 30, 2017."
The bank said that using magnetic stripe in ATM cards could lead to frauds such as skimming and cloning of card, even though the cards are EMV Chip and PIN based.
RBI said: "While the POS terminal infrastructure in the country has been enabled to accept and process EMV Chip and PIN cards, the ATM infrastructure, on the whole, continues to process the card transactions based on data from the magnetic stripe."
Given the loopholes in using magnetic stripe, it has become necessary to mandate to EMV Chip and PIN card acceptance and processing at ATMs also, it added.
It said: "Contact Chip processing of EMV Chip and PIN cards at ATMs would not only enhance the safety and security of transactions at ATMs but also facilitate preparedness of the banks for the proposed "EMV Liability Shift" for ATM transactions, as and when it comes into effect."
Banks should also implement the new requirements at their micro-ATMs in order to ensure uniformity in card payments ecosystem, according to the RBI notification.
In a recent survey conducted by the RBI, it has been found that a third of 4000 ATMs located in both urban and semi urban areas across the country were not operational and did not facilitate proper operating and safety instructions.
A senior RBI official was quoted by NDTV as saying: "We want the migration to be done as fast as possible.
"The instruction is that banks in India and white label ATM operators have to ensure that all the existing ATMs installed/operated by them are enabled for processing of EMV Chip and PIN cards by 30 September 2017.
"All new ATMs shall necessarily be enabled for EMV Chip and PIN processing from inception."
Image: RBI sets deadline for banks to ensure EMV chip, PIN-based transactions at ATMs. Photo courtesy of scottchan/FreeDigitalPhotos.net.
