The Reserve Bank of India has released a new set of rules for the issuance and conduct of Credit and Debit Cards in India. We will provide you with an overview and a few key points from the recent RBI guidelines. You can visit RBI’s official website for more detailed information.
Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022
Effective Date: July 01, 2022
Scheduled Banks (exceptions include Payments Banks, State Co-operative Banks, and District Central Co-operative Banks) and Non-Banking Financial Companies (NBFCs) operating in India are the applicable agencies (credit card rules).
Applicable agencies (debit card rules): All the banks operating in India
Recent RBI guidelines on Credit Card Business:
- A credit card application needs to contain information on the rate of interest, the number of charges, and so on.
- If a credit card application is rejected, the card issuer must provide a specific reason for the rejection.
- Card issuers can introduce an insurance coverage program for a lost credit card or fraud liability.
- The card issuer shall not issue any card or upgrade card without the customer’s consent.
- Card issuers will now need a One-Time Password (OTP) for credit card activation if a customer hasn’t activated the card from their end for more than 30 days from the card issuance date. Without customer consent, the credit card account should be closed within 7 working days from the date of seeking consent from the customer. Customers shouldn’t be held liable for any fees in this case.
- Before the card is activated, the card issuer must not share any customer-related information about the new credit card account.
- The card issuer must adhere to a 7-working-day deadline for credit card account closure requests (t & c applies to any existing credit card dues). If the issuer fails to close the request within 7 working days, a 500 INR penalty per day will be levied on the card issuer.
- Before closing the credit card account, the card issuer must notify the customer that the credit card has been inactive for more than a year. Issuers can close the credit card account after 30 days of no customer response.
- While closing a credit card account, the credit balance (if available) shall be transferred to the customer’s bank account.
- The card issuer must include a warning statement in all the billing statements with the consequences of the minimum due payment, so customers should be aware of the consequences of paying only the minimum amount due.
- The card issuer must provide advanced notice (one month prior) for any changes in charge, where the customer can close their account with no extra charge for the account closure (t&c any existing dues on the credit card).
- For free credit card issuance, card issuers can’t levy any hidden charges on customers.
- Transactions reported as “Fraud” by the customer won’t attract any charges till the dispute is resolved.
- Refunds or any reversed transactions before the payment due date should be adjusted immediately and customers should be notified (if the payment has not yet been made by the customer).
- Credit card upgrades or credit limit enhancements shouldn’t be done prior to the customer’s consent.
- Card issuers and their employees shall not harass customers while collecting debt payments.
Recent RBI guidelines on Debit Card Business:
- Only Savings Bank and current account holders will get Debit cards.
- Cash credit and loan account holders are not eligible for a debit card.
- Banks should not issue a customer debit card forcefully.
We have reviewed a few of the key points from the recent guidelines. However, there are more rules pertaining to Credit, Debit, and Co-branded cards. For detailed information, please visit the RBI official website. It’s always recommended to be aware of all the important rules and regulations circulated by the Reserve Bank of India since you’re using various financial instruments in your daily life.
FAQ on the recent RBI guidelines:
1 July 2022
No, this is just an overview of the guidelines. For complete and detailed information, please visit RBI’s official website.
No, this article is only educational-based. Please refer to the RBI’s official website for complete information.