RBI announces new rules on issue of credit, debit cards: All you need to know

The Reserve Bank of India has announced new guidelines for issuance of credit and debit cards, as well as directions to issuing agencies for the same. The new rules announced by Central Bank will come into effect from 1 July this year. According to the new rules, card-issuers have to honour any request for closure of a credit card within seven working days. Failing that, the issuer will have to pay a penalty of Rs 500 per day to the card holder till the card is closed, provided there are no outstanding dues in the account. Further guidelines have also been issued about interest rates, debit cards and closure of such cards. RBI’s new guidelines for credit card:

• The card-issuer must remember that “issue of unsolicited cards/upgradation is strictly prohibited”. In case a credit card provider upgrades an existing card or activates an unsolicited card without the customer’s permission, and bills them for the same, the issuers will have to withdraw the facility. The will also have to pay a penalty amounting to twice the value of the charges reversed, according to the RBI’s new card guidelines.
• The affected customer can also approach the RBI Ombudsman for redressal of their grievance.
• The card-issuers should ensure “prudence while issuing credit cards and independently assess the credit risk while issuing cards to persons, taking into account independent financial means of applicants.” The companies should also ensure that they/third-party agencies do not intimidate, harass any customers for the purpose of debt collection.
• Written consent is needed before issuance of cards. If written consent is not possible, issuers can use digital means for the consent, but must communicate the same to the RBI.
• No hidden charges can be added while issuing credit cards free of charge.
• Changes in credit card charges can be made only after giving a prior notice of one month. According to the RBI’s new rules, if the cardholder wants to surrender their card on account of any changes in charges to their disadvantage, they can do so without paying any extra charge. The rule is subject to payment of all dues by the card holder.

Individuals can view the detailed RBI guidelines here. The RBI’s new guidelines for debit card state that only customers who have a Savings Bank/Current Account will be issued a debit card. It has also declared that banks must not force a customer to avail the debit card facility, adding that they cannot link issuance of the card to availing any other facility of the bank. The RBI has also stated that according to the new rules, any information obtained from the customer at the time of opening the account or issuing the card cannot be revealed by the card-issuer without the explicit permission of the customer. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.