RBI has said that it has noticed instances of card- not -present (CNP) transactions being effected without the mandated additional authentication/validation even where the underlyingtransactions are essentially taking place between two residents in India. According to RBI, some entities are evading the mandate of additional validation resulting in foreign exchange outflow. Such camouflaging is made possible by merchant transactions being acquired by banks located overseas resulting in an outflow of foreign exchange in the settlement of these transactions.RBI has advised that entities adopting such practices leading to willful non-adherence and violation of extant instructions should immediately put a stop to such arrangements.