RBI Tokenisation Explained: What is tokenisation and Why RBI has issued new guidelines ?

RBI Tokenisation: Recently RBI policy is in news regarding extension of Tokenisation Duration for all Debit Cards and Credit Cards for about 3 months to evade malafide function, disruption chain and  to facilitate easy access and smooth way to all concerned card holders. The RBI New Policy says that no other third party, entity, can store the COF ( CARD ON FILE ) except main card issuer and the networks of card in payments and transactions. 

The reason behind the proposing new deadline is nothing more than that to meet the request or demand of other trafficker and industries who approached the Reserve Bank of India for altering new guidelines. 

RBI Tokenisation Explained

Under this proposal, dealers are not able to access card holders card data and it become mandatory for them to  apply card on file token as a substitute of card data information. This allows customers or card carriers to avail detailed information of card in order to access E-payment or online transaction. 

So under this newly implemented proposal of RBI states that the TOKENISATION stands for replacement of real card information with an other details in encrypted form which coded as TOKEN. This allows specified token which can be used to  do transaction on card without need to contact . 

CARD – ON -FILE ( COF) undertakings entails card holder to stock his own mastercard or visa transaction data. The card owner proclaim same dealer to pay the stored mastercard or visa account.

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  • New token policy reduces the scope of malfunction in transaction and secure the privacy of card holders data or any private information .
  • It also facilitates easy digital transaction in the economy to facilitate e – dealings
  • It also reduces scope of frauds done by traders who creates unique encrypted  code inspite of actual information of card owner.
  • Also frequency of erosion of card details or data theft is reduced.
  • This process of tokenisation is consider safer because it will not enjoy any information with any dealer during process of transaction.
  • RBI monetary policy brings to easy change in transaction world by smoothing dealing and agreement in monetary exchange policy .
  • Lessen cyber frauds when it comes up to policy of tokenisation.


After the announcement of new rules, customers privacy were secured by not revealing data or information with any entity or to any merchant during process of transaction period. Further more it will also not save the customer data over the e -commerce platform which can be enjoy by fraud in future. Encrypted dubbed token helps in preserving their natural information.

RBI Tokenisation Explained: What is tokenisation and Why RBI has issued new guidelines ?


  • RBI encouraging their customers to tokenise their card in order to pave norm of convenient transaction and safeguard about their card details. 
  • Central bank also directed to payment assemblage , online dealers to not enjoy any sensitive data of card owner.
  • As per the issued norms , consumers are obliged to create specific code or substitute token instead of exposing real card information.
  • This policy comes into process from 1st October 2022.


So when you went to a  platform to purchase something, you use your debit card or credit card where your card information is revealed or saved in that particular platform via e- commerce. This information can be leaked or theft by someone in future. So to avoid sensitive of data, CENTRAL GOVT new tokenisation policy carries customer larger interest where therr card can be substitute with an unique dubbed code as “token” which is used to protect the actual card details. 

Not only it entails customer interest but it also leverage digital economy by promoting e -commerce , e – marketing, e – transaction, erasing threat of theft or any leakage. Hence RBI encourages its consumers to participate in this new policy to evade from threat of any  cyber crime which pay off with monetary loss or any financial damage. 

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