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RBI New Guidelines for Credit and Debit Cards - All you need to know

Reserve Bank of India (RBI) has almost overhauled credit card rules, making it more secured for the users. The Central Bank of India has issued fresh guidelines to the issuers making it mandatory for them to issue new card only after getting digital or written request for that. In new credit card rules,
RBI has made it mandatory for the issuer that any request for closure of a credit card should have to be honoured within seven working days. 

Failing to do that the issuer will have to pay the penalty of ₹500 per day of delay to the customer till the closure of the account, provided there is no outstanding in the account.

Here we list out 10 important changes in new credit card rules that will become effective from 1st July 2022:

1] Card-issuers are directed to be guided by the instructions on interest rate on advances issued by the Reserve Bank of India as amended from time to time, while determining the interest rate on credit card dues. Interest charged on credit cards shall be justifiable having regard to the cost incurred and the extent of return that could be reasonably expected by the card-issuer. Card-issuers shall also prescribe an interest rate ceiling in line with other unsecured loans, including processing and other charges, in respect of credit cards as part of their Board approved policy.

2] Card-issuers shall ensure that wrong bills are not raised and issued to cardholders. In case, a cardholder protests any bill, the card-issuer shall provide explanation and, wherever applicable, documentary evidence shall be provided to the cardholder within a maximum period of 30 days from the date of complaint. No charges shall be levied on transactions disputed as ‘fraud’ by the cardholder until the dispute is resolved.

3] Unsolicited loans or other credit facilities shall not be offered to the credit cardholders without seeking explicit consent. In case an unsolicited credit facility is extended without the written/explicit consent of the cardholder and the latter objects to the same, the card-issuer shall not only withdraw the facility, but also be liable to pay such penalty as may be considered appropriate by the RBI Ombudsman, if approached.

4] Card-issuers shall not unilaterally upgrade credit cards and enhance credit limits. Explicit consent of the cardholder shall invariably be taken whenever there is/are any change/s in terms and conditions. In case of reduction in the credit limit, the card-issuer shall intimate the same to the cardholder.

5] Card-issuers/their agents shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the credit cardholders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations.

6] The disclosure of customers’ information to the DSAs/DMAs/recovery agents shall also be limited to the extent that will enable them to discharge their duties. Personal information provided by the cardholder but not required for recovery purposes shall not be released by the card-issuer. The card-issuer shall ensure that the DSAs/DMAs/recovery agents do not transfer or misuse any customer information during marketing of credit card products.

6] The RBI directions say that any request for closure of a credit card should have to be honoured within seven working days by the credit card-issuer, subject to payment of all dues by the cardholder. If the card issuer fails to process of closure of credit card within seven working days, it should pay penalty of ₹500 per day of delay to the customer till the closure of the account, provided there is no outstanding in the account.

7] Changes in charges shall be made only with prospective effect giving prior notice of at least one month. If a cardholder desires to surrender his/her card on account of any change in charges to his/her disadvantage, he/she shall be permitted to do so without levying any extra charge for such closure, subject to payment of all dues by the cardholder.

8] There shall not be any hidden charges while issuing credit cards free of charge.

9] Card-issuers do not follow a standard billing cycle for all credit cards issued. In order to provide flexibility in this regard, cardholders shall be provided a one-time option to modify the billing cycle of the credit card as per their convenience.

10] Card-issuers shall seek explicit consent of the cardholder to adjust credit amount beyond a cut-off, one percent of the credit limit or ₹5000, whichever is lower, arising out of refund/failed/reversed transactions or similar transactions against the credit limit for which payment has already been made by the cardholder. The consent shall be obtained through e-mail or SMS within seven days of the credit transaction. The card-issuers shall reverse the credit transaction to the cardholder’s bank account, if no consent/response is received from the cardholder.



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