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The Reserve Bank of India (RBI) has deferred the implementation of tokenisation of cards for online transactions by six months, according to an official statement.

The timeline for storing of Card on File data is extended by six months, i.e., till June 30, 2022.

In addition to tokenisation, industry stakeholders may devise alternate mechanisms to handle recurring e-mandates, and EMI options, the RBI said in a statement.

RBI issued fresh guidelines in September 2021 giving companies until the end of the year to comply with the regulations and offering them the option to tokenise. It has ordered all companies in India to purge saved credit and debit card data from their systems from January 1, 2022.

The initial deadline would have meant that come 1 January, 2022, e-commerce companies and various online platforms would not be able to save customers credit and debit card data.

Tokenisation is a process by which card details are replaced by a unique code or token, generated by an algorithm, allowing online purchases to go through without exposing card details, in a bid to improve data security.

Meanwhile, senior executives at state-owned banks and private lenders said they worry the move will lead to a marked decline in card transactions and an increase in cash payments over the short-term, undoing years of work by lenders and the government to boost digitisation.

The RBI said it has received various representations on the card tokenisation guidelines and the decision to defer its implementation came after it.

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