New credit card rules have been implemented regarding the billing, issuing and closure process which are in effect from the beginning of July 2022. The Reserve Bank of India to provide more understanding and transparency between the lender and the cardholder modified the credit card rules. With these changes, the RBI has made the process more secure and trustworthy for the customers while providing a sense of authority. The Central Bank had issued its instructions for the lenders on issuing and operating credit and debit card business earlier this year, which came into effect with the start of this month.
RBI Revised Credit Card Rules
On April 21, RBI released a statement that said, “In exercise of the powers conferred by Sections 35A and Section 56 of the Banking Regulation Act, 1949 and Chapter IIIB of the Reserve Bank of India Act, 1934, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.”
Changes Made Under New Directives From RBI
Under the modified rules, RBI has released a set of new rules under which firms will operate their credit card business which includes the steps like issuing, billing, and closure process.
New directions regarding operating the credit card business apply to every Scheduled Bank except “excluding Payments Banks, State Co-operative Banks and District Central Co-operative Banks” and to all the Non-Banking Financial Companies (NBFCs).
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Central Bank has made multiple directives:
- Regarding close requests for credit cards, the RBI said, “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.”
- If the credit card is not closed within seven days of the request made then RBI said the banks will have to pay ₹500 each day as a fine till the closure. “Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of Rs 500 per day of delay payable to the customer, till the closure of the account provided there is no outstanding in the account.” the bank said.
- “Subsequent to the closure of credit card accounts, any credit balance available in credit card accounts shall be transferred to the cardholder’s bank account. Card-issuers shall obtain the details of the cardholder’s bank account, if the same is not available with them,” Regulator said.
