The Reserve Bank of India (RBI) has asked banks to bring into being additional information verification in case of transactions that are done online from August 1st, 2009.

The banks are required to increase the security for customers for ‘card not present' transactions. In a notification to the banks, RBI stated: "The use of credit and debit cards has been increasing. We have been reviewing various options to enhance the security of online card transactions."

Transactions where both cards and card holders are not present at the point of sale or are done through internet or telephone are known as ‘Card not present' transactions.

RBI said that banks should introduce a system of ‘online alerts' for the cardholders that make card not present transactions of Rs 5,000 and above. Banks are strictly directed to follow the instructions.

RBI added that if the banks do not follow the directives, penalties prescribed under the Payment and Settlement Systems Act 2007 (Act 51 of 2007) will be levied.