RBI has strictly ordered banks to make mobile and phone banking more secure to prevent identity frauds in non branch banking services.

The banks would now have to put an additional cover assuring the authenticity of the customer making the debit or credit card transaction over the phone. If they do not do so then they would be penalised, the RBI has warned.

As per the RBI, banks will have to put into play a system by next year wherein the debit and credit card customers would have to provide an additional password for IVR ( Interactive Voice Response) transactions.

IVR transactions are telephonic transactions wherein the customer dials the bank's customer care number and is directed thereupon by a recorded prompter to the transaction of his need.

With the new security measure the customer would now have to dial another additional password to authenticate the transaction other than the details which he earlier used to provide for the transaction.

Banking through non branch banking services has risen tremendously in the last few years through routes like Internet, mobile and phone banking.

To tackle the rising number of frauds using these non branch banking channels, the RBI had asked the banks to accomodate from April 2009 onwards, "a system of providing for additional authentication/validation based on information not visible on the cards" for transactions where card was actually not presented.

This directive was only meant for online transactions and did not include IVR transactions.

RBI has now decided to "extend this requirement of additional authentication/validation to all CNP (card not present) transactions including IVR transactions."

These security codes would be different from those visible on the cards.

The banks would also be putting a system of 'Online Alerts' to the cardholder for all transactions where 'card is not present' of value of Rs. 5000 and above.