The Reserve Bank of India (RBI) announced revised rules for the issue and closure of credit and debit cards, as well as rules for billing and directions for issuing agencies.

The new rules for credit card usage applied to scheduled banks (barring payments banks, state co-operative banks, and district central co-operative banks) and would come into effect from the 1st of July.

The RBI said,  “These cover general and conduct regulations relating to credit, debit and co-branded cards… (and) these Directions relating to debit (and credit) cards shall apply to every bank operating in India.”

Here are some credit card rule changes you need to know:

  • Unsolicited credit cards: Issue of unsolicited cards, or unsolicited upgrading of cards, will be strictly prohibited. “In case an unsolicited card is issued, or an existing card is upgraded and activated, without the customer’s explicit consent (i.e., a bill is generated) the card-issuer shall not only reverse charges but also pay a penalty amounting to twice the value of the charges reversed,” the RBI has ordered.
  • Billing cycle: Cardholders will be given a one-time option to customize the billing date or cycle. Any refund, due after opting for a new cycle, will be adjusted to reflect the amount owed.
  • Delay in billing: “Card-issuers shall ensure there is no delay in sending/dispatching/emailing bills/statements and the customer has a sufficient number of days (at least a fortnight) for making payment before interest is charged.
  • Consent: Card issuers need to have the explicit consent of customers. The RBI had said written consent is needed before a credit card can be issued. If written consent is not possible, digital means can be used but must be communicated to the central bank.
  • An additional factor of authentication: From July 1, before a customer makes the first payment to any merchant, consent and an additional factor of authentication (AFA) will be needed.
  • Credit card closure: If the card is not used for more than a year, the bank may close it. The cardholder will be informed and given 30 days to respond, following which the process of deactivating the card will be started.

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