New credit card rules: issuer penalty, other details in 10 points
New credit card rules: The Reserve Bank of India (RBI) has almost overhauled the credit card rules, making them more secure for users. The Central Bank of India has issued new guidelines for issuers requiring them to issue a new card only after receiving a digital or written request to do so. In the new credit card rules, RBI has made it mandatory for the issuer that any request to close a credit card be honored within seven business days. Failing this, the issuer will have to pay the penalty of ₹500 per day of delay to the customer until the closure of the account, provided that there is no outstanding amount on the account.
Here we list 10 important changes to the new credit card rules that will come into effect from July 1, 2022:
1]Card issuers are required to follow the instructions relating to the rate of interest on advances issued by the Reserve Bank of India, as amended from time to time, when determining the rate of interest on membership dues. credit card. Interest charged on credit cards must be justifiable in view of the cost incurred and the magnitude of the return that the card issuer could reasonably expect. Card issuers must also prescribe an interest rate cap consistent with other unsecured lending, including processing fees and the like, with respect to credit cards as part of their Board-approved policy.
2]Card issuers ensure that false invoices are not issued and issued to cardholders. In the event of a disputed invoice by a cardholder, the card issuer will provide explanations and, if necessary, supporting documents will be provided to the cardholder within a maximum period of 30 days from the date of the complaint. No charges will be levied on transactions disputed as “fraud” by the cardholder until the dispute is resolved.
3]Unsolicited loans or other credit facilities should not be offered to credit card holders without their express consent. In the event that an unsolicited credit facility is extended without the cardholder’s written/explicit consent and the cardholder objects, the card issuer will not only withdraw the facility, but will also be required to pay the penalty deemed appropriate by the RBI Ombudsman, if approached.
4]Card issuers should not unilaterally upgrade credit cards and increase credit limits. The cardholder’s express consent must always be taken whenever there is a change in the terms and conditions. In the event of a credit limit reduction, the card issuer will notify the cardholder.
5]Card issuers/their agents shall not use intimidation or harassment of any kind, verbal or physical, against any person in their debt collection efforts, including acts intended to publicly humiliate or intruding on the privacy of credit cardholders’ families. members, arbitrators and friends, make threatening and anonymous calls or make false and misleading statements.
6]Disclosure of customer information to DSAs/DMAs/collectors should also be limited to the extent that will enable them to perform their duties. Personal information provided by the cardholder but not required for recovery purposes will not be disclosed by the card issuer. The card issuer must ensure that DSAs/DMAs/collectors do not transfer or misuse customer information when marketing credit card products.
6]RBI instructions state that any request to close a credit card must be honored within seven working days by the credit card issuer, subject to payment of all dues by the cardholder. menu. If the card issuer does not close the credit card within seven working days, he will have to pay a penalty of ₹500 per day of delay to the customer until the closure of the account, provided that there is no outstanding amount on the account.
7]Tariff changes are only made with prospective effect subject to at least one month’s notice. If a Cardholder wishes to return their Card due to a change in charges to their detriment, they are entitled to do so without charging any additional charge for such closure, subject to payment of all dues by the Cardholder . .
8]There will be no hidden charges when issuing free credit cards.
9]Card issuers do not follow a standard billing cycle for all credit cards issued. In order to provide flexibility in this regard, cardholders will be offered a unique option to change the credit card billing cycle as per their convenience.
10]Card issuers must request the cardholder’s express consent to adjust the credit amount above a threshold, one percent of the credit limit or ₹5000, whichever is lower, resulting from refund/failure/cancellation or similar transactions against the credit limit for which payment has already been made by the cardholder. Consent must be obtained by email or SMS within seven days of the credit transaction. Card issuers will reverse the credit transaction to the cardholder’s bank account, if no consent/response is received from the cardholder.