Attention Credit Holders! You Will Have to Pay ₹500 Per Day if...| Read RBIs Latest Guidelines Here
Attention Credit Holders! You Will Have to Pay ₹500 Per Day if…| Read RBI’s Latest Guidelines Here
New Credit Card Rules will come into effect from July 01, 2022. A fine of Rs 500 will be levied on a card holder if he/she makes late payment while closing the credit card account.
New Delhi: The Reserve Bank of India (RBI) has issued a master direction on credit card and debit card issuance and operations called Credit Card and Debit Card – Issuance and Conduct Directions, 2022. As per the new directions, a cardholder has to pay a fine of Rs 500 if there is a delay in closing the credit card account. The new rules will come into effect from July 01, 2022, and the provisions related to credit cards shall apply to every scheduled bank (excluding payments banks, state co-operative banks, and district central co-operative banks) and all non-banking financial companies (NBFCs) operating in India.
“These directions cover the general and conduct regulations relating to credit, debit and co-branded cards which shall be read along with prudential, payment and technology & cyber security-related directions applicable to credit, debit and co-branded cards, as issued by the Reserve Bank,” RBI said in a media release.
Check RBI rules on the closure/issuance of credit cards here:-
Any request for closure of a credit card shall be honoured within seven working days by the credit card-issuer, subject to payment of all dues by the cardholder. Subsequent to the closure of credit card, the cardholder shall be immediately notified about the closure through email, SMS, etc.
Cardholders shall be provided option to submit request for closure of credit card account through multiple channels such as helpline, dedicated e-mail-id, Interactive Voice Response (IVR), prominently visible link on the website, internet banking, mobile-app or any other mode.
The card-issuer shall not insist on sending a closure request through post or any other means which may result in the delay of receipt of the request.
Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of ₹500 per day of delay payable to the customer, till the closure of the account provided there is no outstanding in the account.
Card issuers shall provide a one-page Key Fact Statement along with the credit card application containing the important aspects of the card such as rate of interest, quantum of charges, among others. In case of rejection of a credit card application, the card issuer shall convey in writing the specific reason/s which led to the rejection of the application.
Card issuers may consider introducing, at the option of the customers, an insurance cover to take care of the liabilities arising out of lost cards, card frauds, etc. In cases where the card-issuers are offering any insurance cover to their cardholders, in tie-up with insurance companies, the card-issuers shall obtain explicit consent in writing or in digital mode from the cardholders along with the details of nominee/s.
The issue of unsolicited cards/up-gradation is strictly prohibited. In case, an unsolicited card is issued/an existing card upgraded and activated without the explicit consent of the recipient and the latter is billed for the same, the card-issuer shall not only reverse the charges forthwith but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed. In addition, the person in whose name the card is issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card as per the provisions of the Ombudsman Scheme, i.e., for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him/her.
There have been instances where unsolicited/applied-for cards have been misused before reaching the persons in whose names these have been issued. It is emphasized that any loss arising out of misuse of such unsolicited cards shall be the responsibility of the card-issuer only and the person in whose name the card has been issued shall not be held responsible for the same.
Card issuers shall seek One Time Password (OTP) based consent from the cardholder for activating a credit card, if the same has not been activated by the customer for more than 30 days from the date of issuance. If no consent is received for activating the card, card-issuers shall close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation from the customer. In case of a renewed or replaced card, the closure of an inactivated card shall be subject to payment of all dues by the cardholder.
No card issuer shall report any credit information relating to a new credit card account to Credit Information Companies prior to activation of the card. Any credit information relating to such inactivated credit cards already reported to Credit Information Companies shall be withdrawn immediately; under no circumstances it shall take more than 30 days from the effective date of these directions.
The consent for the cards issued or the other products/services offered along with the card shall be explicit and shall not be implied. In other words, the written consent of the applicant shall be required before issuing a credit card. Alternatively, card-issuers may use other digital modes with multifactor authentication to obtain explicit customer consent. Such alternative digital modes, if any used by the card-issuer, shall be communicated to the Department of Regulation, Reserve Bank of India.
Card-issuers shall ensure that the telemarketers they engage, comply with directions/regulations on the subject issued by the Telecom Regulatory Authority of India (TRAI) from time to time while adhering to guidelines issued on “Unsolicited Commercial Communications – National Customer Preference Register (NCPR)”. The card issuer’s representatives shall contact the customers only between 10:00 hrs and 19:00 hrs.
The decision-making power for the issue of a credit card to a customer shall remain only with the card-issuer and the role of the Direct Sales Agent (DSA)/Direct Marketing Agent (DMA)/other agents shall remain limited to soliciting/servicing the customer/ account.
Card issuers shall ensure prudence while issuing credit cards and independently assess the credit risk while issuing cards to persons, taking into account the independent financial means of applicants.
As holding several credit cards enhances the total credit available to any consumer, card issuers shall assess the credit limit for a credit card customer taking into consideration all the limits enjoyed by the cardholder from other entities on the basis of self-declaration/credit information obtained from a Credit Information Company, as appropriate. This shall be uniformly applied as per the board-approved policy of the card issuer.
Card issuers shall ensure complete transparency in the conversion of credit card transactions to Equated Monthly Instalments (EMIs) by clearly indicating the principal, interest, and upfront discount provided by the merchant/card-issuer (to make it no cost), prior to the conversion. The same shall also be separately indicated in the credit card bill/statement. EMI conversion with an interest component shall not be camouflaged as zero-interest/no-cost EMI.
Card issuers shall ensure that loans offered through credit cards are in compliance with the instructions on loans and advances issued by the Reserve Bank from time to time.
Card issuers shall ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder.
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