Highlights:
• The Reserve Bank of India has issued new credit and debit card guidelines.
• The guidelines include a set of standard operating procedures
• The following are the key points from the RBI’s credit and debit card guidelines
The Reserve Bank of India (RBI), India’s central bank, has announced a new set of recommendations to safeguard customers from fraud and hidden costs, among other things, in light of the expanding use of credit cards in the country.
Central banker has a broad set of recommendations, rules, and fines for banks and credit card issuers under its new guidelines.
It’s worth noting that these new criteria also apply to debit cards, but credit cards receive the most attention.
This is expected considering the rise in popularity of credit cards during the COVID-19 epidemic — total outstanding credit cards in December 2019 were 55 million, up to roughly 72 million by the end of February 2022.That’s a roughly 30% increase, and it’s one of the reasons Axis Bank bought Citi India’s retail operations, including the profitable credit card business.
Here are the key highlights for guidelines related to credit cards
There are no hidden fees on credit cards that are given away for free. Card issuers can now consider purchasing liability insurance to cover costs resulting from lost credit cards or credit card fraud. The issuer will need to get the cardholder’s explicit authorization for this.
To activate a credit card that has not been activated within 30 days of its issuance, a one-time password will be required. This will aid in the event that a card is intercepted before it is delivered to the consumer by an unauthorised individual.
Will require a one-time password to activate a credit card that has not been activated within 30 days from the date of issuance. This will help cover scenarios where an unauthorised person intercepts cards before their delivery to the customer. Credit information of the card holders shall not be reported to any credit bureaus like Cibil, CRIF, Experian, etc., before the activation of the card. Ensure complete transparency in the conversion of credit card transactions into equated monthly instalments (EMI) by clearly mentioning the amount of principal, interest, discount and charges, if any. EMI conversion with interest shall not be disguised as no-cost or zero-interest EMI. In case of rejection of a credit card application, the issuer shall convey in writing the reason for such rejection.
To activate a credit card that has not been activated within 30 days of its issuance, a one-time password will be required.
This will aid in the event that a card is intercepted before it is delivered to the consumer by an unauthorised individual.
Before the card is activated, the cardholders’ credit information will not be reported to any credit agencies such as Cibil, CRIF, Experian, and others.
Ensure complete transparency when converting credit card purchases to equivalent monthly instalments (EMI) by clearly stating the principal, interest, discount, and charges, if applicable.
No interest-bearing EMI conversion shall be misrepresented as a no-cost or zero-interest EMI.In the event that a credit card application is denied, the issuer must explain why in writing.
Requests for the cancellation of an existing credit card must be fulfilled within seven working days. If this is not done, the customer will be charged a penalty of $500 each day of delay.
Credit cards will be closed if they have not been used for a year, with a 30-day notification to the cardholder. Any changes to credit card charges must be communicated 30 days in advance of their introduction.
Also Read: RBI GUIDELINES ON DIGITAL BANKING UNITS
