Explanation:

Reserve Bank of India has allowed for tokenisation of cards while making payments, which can reduce the risk of card data being stolen.

• Further, RBI has directed that no entity or merchant, other than card issuers and card networks, should store card details — or card-on-file (CoF) — from January 1, 2022.

About Tokenisation

• Tokenisation refers to replacement of actual card details with an alternate code called the “token”.
• It will be unique for a combination of card, token requestor and device. 
• Benefits: It reduces the frauds that occur by sharing card details like card number and CVV. 

Card-on-File (CoF) Transaction

• It is a transaction where a cardholder has authorised a merchant to store the cardholder’s Mastercard or Visa payment details. 
• The cardholder then authorises that same merchant to bill the cardholder’s stored Mastercard or Visa account.
• E-commerce companies and airlines and supermarket chains normally store card details in their system.

Hence both statements are correct.