Beginning July 1, Credit Card Rules will be in place regarding credit cards, including those regarding card issuance, billing, and closure. Credit cards will be authorized for all schedule banks (excluding Payments Banks and State Co-operative Banks) and all Non-Banking Financial Companies (NBFCs) in India.In accordance with the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, the central bank issued the instructions. Under the new credit card rules, the RBI has issued guidelines to help the common man with issues regarding card issues, billing, and card closures.
The following are the new credit card rules that will take effect on July 1
Credit Card Companies Cannot Issue Unsolicited Credit Cards
With its new credit card regulations, the RBI has strictly prohibited the issue of unsolicited credit cards. RBI stated that if an unsolicited card or existing card is upgraded and activated without the recipient’s explicit consent and the latter is billed for the same, the card-issuing entity must not only reverse the charges forthwith, but also pay a penalty without demur to the recipient of twice the value of the reversed charges. Furthermore, individuals under whom credit cards have been issued may also contact the RBI Ombudsman, who can determine the amount of compensation payable by the credit card company to the recipient of the unsolicited card. Credit cards will be issued free of charge without any hidden fees.
A heavy penalty for non-closing of a credit card despite requests
The RBI has announced that credit card providers will need to honor any closure requests by cardholders within seven business days. The RBI has stated in its guidelines that the cardholder must be notified about the closure of their credit card immediately after it is closed through email, SMS, etc. RBI said that a penalty of Rs 500 per day of delay shall be payable to customers if the card issuers fail to complete the closure process within seven working days, provided that the account has no outstanding charges.
The credit balance will be credited to the card holder’s account
As per the new rules, if there is a credit balance on a card holder’s account, that should be credited to the card holder’s bank account. “Following the closure of credit card accounts, any credit balances remaining in them shall be transferred to the card holder’s bank account. The RBI instructs card-issuers to obtain the card holder’s bank account details, if they don’t already have them.”
Choose Your Credit Card Billing Cycle
Billing cycles of credit cards are defined as the period of time during which a credit card bill is generated. In accordance with the RBI guidelines, billing cycles for credit cards will begin on the 11th day of the previous month and end on the 10th day of the current month as of July 1. “All credit cards issued by issuers do not follow the same billing cycle. Cardholders will be able to modify the billing cycle of their credit card once in order to provide flexibility,” RBI said.
Credit Card Companies Cannot Send Wrong Bills
Credit card companies are prohibited from sending you incorrect bills apart from these rules. A cardholder who protests a bill shall be provided with explanations and, when appropriate, documentary evidence within a maximum of 30 days from the date of complaint,” says RBI’s notification of the new credit card rules.