November 14: The Nepal Rastra Bank's lack of rigidity on implementation of chip based ATM card has apparently triggered the ATM frauds of the recent days. Various kinds of cards being used by banks and financial institutions (BFIs) of Nepal including debit, credit and pre-paid are magnetic stripe card.
NRB had announced of implementing considerably more secure chip based card in the budget speech of the last FY. However, the BFIs are not showing any interest on displacement of magnetic strip card even after cross the given deadline. NRB had provided one year period to the BFIs to displace the magnetic stripe card within mid-October 2015.
NRB believes that the use of chip based card will help of control the duplication and fraud caused by magnetic stripe card. However, the bank mentioned that implementation of chip based card immediately is not possible.
Meanwhile, Upendra Paudyal, President of Nepal Bankers Association points out that magnetic stripe card is not only the reason for the cause of ATM frauds. As per him, the confidential information is theft from ATM booth so additional supervision is necessary.