Economic Times, October 19, 2009

IT ALL started off when Ashwin Gupta (name changed) got a call from a bank representative telling him that they suspected the data on his card had been compromised and that they were taking the precautionary step of blocking his debit card.

Ashwin put the phone down mentally appreciating the bank for its adeptness, until he realised that by virtue of having a combined debit and ATM card, he wouldn’t be able to withdraw cash from any ATM machine until his card was replaced.

No doubt, he could always withdraw cash from a bank branch but there was the hassle of taking the time out to visit the branch and what if it was an emergency and he needed the money after the bank had closed for the day.

This is when he began wondering whether there were any other options to having an ATM-cum-debit card and whether he should go ahead and separate them. If you’re mulling over the same issue, SundayET gives you a lowdown on what the expert take is on the subject.

When it comes to separating an ATM and debit card, most feel that the decision is largely a question of the nature of the individual and a function of how careful they are.

Instead of blindly accepting cards from the banks, consumer guidance experts feel individuals should assess their behavioural and payment needs and use that as a criteria to decide whether they want combined or separate cards.

A large number of people, for instance, are known to have been careless enough to leave their ATM card in the machine slot even In the period between actually leaving the card behind and the loss is discovered, you stand the risk of having a third person conduct any number of transactions and leaving your bank balance sizeably depleted. Another issue is the possibility of having your ATM card retained by the machine.

“In that case, you can neither withdraw the necessary money immediately, nor do you have the option of using your debit card for purchases,” says Amitabh Singh, partner, Ernst & Young.

With a separate ATM card, however , the chances of misuse are slightly limited. According to Amarjeet Singh, assistant project co-ordinator at CUTS Centre for Consumer Action, Research and Training, “The only chances of misuse are of withdrawal of money through an ATM.

However, these days most of the ATMs have CCTVs that can help in identifying the culprits. There are less chances of misuse if there are less uses,” he says.

Others feel that as far as the ATMcum-debit card is concerned, it is an evolving product where the glitches are slowly ironed out, as and when they are identified. Take for instance, the issue of security. Sonalee Panda, head of products and marketing at ING Vysya Bank, points out that an individual could could always opt for PIN-based ATM-cum-debit cards instead of signature-based debit cards, which are currently issued by most banks.

“This means that each time you need to make a transaction at an outlet , you will have to key in this particular number and hence this could curtail abuse of the card, she says.

However, if you are extremely particular about having separate cards, Amarjeet Singh says it is better to get this done at the time of opening your account or taking the card as it may not entail a fee at that time. You do, however, have the option of separating it even at a later point.

All you need to do is to visit a branch and fill out a form and give the bank about 3- 4 working days to complete the process.

“There is, however, a onetime replacement fee of about of Rs 100 (plus taxes) that you will need to pay for the ATM card and another Rs 100 and taxes, towards the annual fee for a debit card,” says an official of HDFC Bank.

Also keep your bank updated about changes in address, since you don’t want the new card to be delivered to the wrong place. However, do not be surprised if you are denied the possibility of separating the cards as a large number of banks do not offer this facility to its consumers.

Bank officials claim that issuing each card comes at a cost which they currently do not pass on to the consumer and is absorbed by the bank.

However, issuing two separate cards, would mean an escalation in the cost that the banks themselves would have to incur, says C S Jain, head of personal banking at IDBI Bank.

Moreover, over the last few years, most banks have adapted their technology to dealing with the needs of combined ATM and debit cards and would also require modifications to issue separate cards.

Some bank officials feel the entire issue of whether debit cards and ATM cards is more to do with a psychological feeling of safety or security in the mind of the individual rather than actual risk mitigation at ground level.

“The risks associated with losing the card remain the same, irrespective of whether you maintain it separately or you have a combined ATM cum debit card. In fact, it only inconveniences an individual to have to carry two separate cards all the time,” says Panda.

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