The Reserve Bank of India has changed the rules regarding credit and debit cards, including those relating to the closing of credit cards and billing. These rules will come into effect from July 1, the central bank said in a notification. The central bank has issued general guidelines on the issuance and operation of credit and debit cards. Provisions relating thereto under the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Guidelines, 2022 shall apply to Scheduled Banks (Excluding Payment Banks, Co-operative Banks) State and District Central Co-operative Banks) and all Non-Banking Financial Corporations (NBFCs) operating in India.
Here are the credit card rules that will come into effect from July 1
No Unsolicited Credit Cards: The RBI has strictly prohibited the issuance of unsolicited credit cards in its new credit card rules. “In the event that an unsolicited card is issued / an existing card upgraded and activated without the express consent of the recipient and the recipient is charged for the same, the card issuer shall not only reverse the charge immediately , but also pay a penalty without hesitation to the recipient amounting to twice the value of the charges waived,” he said.
Billing cycle: A credit card billing cycle is defined as the period during which a credit card bill is generated. Starting July 1, your credit card billing cycle will start on the 11th day of the previous month and end on the 10th day of the current month, the RBI directive mentioned.
No delay in sending invoices: “Card issuers must ensure that there is no delay in sending/sending/emailing invoices/statements and that the customer has sufficient days (at least a fortnight) to make payment before interest starts being charged,” the RBI said. Card issuers must put in place a mechanism to ensure that the cardholder receives the billing statement as per the orders of the RBI.
No more fake invoices: Card issuers will need to ensure that false invoices are not issued and issued to cardholders. “In the event of a protest by a cardholder against an invoice, the card issuer must provide explanations and, where applicable, supporting documents must be provided to the cardholder within a maximum period of 30 days from from the date of the claim,” the order reads.
Non-closing of credit card to result in heavy penalty: Credit card issuers will have to honor any request from cardholders to close their credit cards, within seven working days, the RBI said. Following the closure of the credit card, the cardholder must be notified immediately of the closure via email, SMS, etc., the RBI said in its guidelines. “Failure on the part of card issuers to complete the closing process within seven working days will result in a penalty of Rs 500 per day of delay payable to the customer, until the account is closed provided there is no has no outstanding balance in the account,” the RBI said.
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