Attention! RBI Announces New Guidelines For Debit & Credit Cards

Yesterday, i.e. on 21st April 2022, India’s central bank the RBI announced a string of new guidelines surrounding credit cards and debit cards.

The master directions pertain to credit card and debit card issuance and conduct and will be effective from 1st July 2022.

Here are the key highlights from the announced guidelines which will impact the card issuers, existing users and new users in different ways.

Key Announcements On Credit Cards

1. EMI conversion with interest component shall not be camouflaged as zero-interest/no-cost EMIs.

2.No charges shall be levied on transactions disputed as ‘fraud’ until the dispute is resolved.

3. Card issuers can now consider an insurance cover for liabilities arising out of lost credit cards, credit card frauds etc. subject to the cardholder’s permission.

4. Card issuers will require OTP from cardholders to activate a credit card that has not been otherwise activated within 30 days from the date of issuance.

5.No credit information of the new credit card account shall be reported to any credit bureaus before the card activation.

6. Card issuers should clearly indicate the principal, interest and upfront discount provided by them or the merchant before conversion of card transactions into EMIs.

7. Details related to EMI conversion of transactions should be separately indicated in the credit card bill/statement.

8.In case of rejection of a credit card application, the card-issuer shall convey in writing the specific reasons for it.

9. No hidden charges while issuing credit cards free of charge.

10. Card closure requests shall be honoured by the issuer within 7 working days. Failure to do so shall result in a penalty of ₹500 per day of delay, payable to the customer till the closure of the account, provided there is no outstanding in the account.

11. Closure of card not used for more than 1 year can be initiated after intimating the cardholder, who has to reply within 30 days. Else the card account shall be closed by the card issuer.

12. Any changes in credit card charges shall be intimated 30 days prior to their implementation

Key Announcements On Debit Cards

1. Debit cards shall only be issued to customers who have a savings bank or current account.

2.No debit cards shall be issued to cash credit or loan account holders. However, banks are not precluded from linking the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana accounts with a debit card.

3. Banks shall not force a customer to avail a debit card facility and shall not link issuance of a debit card to availment of any other facility from the bank.

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