RBI Issues New Credit Card Rules, To Be Effective From 1st July

NEW DELHI: The Reserve Bank of India (RBI) has notified fresh guidelines about debit cards and credit card issuance which will be effective from the first day of July this year.

According to RBI the guidelines for the news changes in credit cards include the closure of credit cards, billing, etc.

Notably, the credit card provisions under RBI (Credit Card and Debit Card- Issuance and Conduct) Directions, 2022 will be applicable to almost all scheduled banks and NBFCs (Non-Banking Financial Companies).

However, it will not be applicable in District Central Cooperative Banks, Payment Banks and State Co-operative Banks.

Important points:

1. Billing cycle in a credit card: If a credit card statement is generated on the 10th of all months that the billing cycle will start from the 11th of the last month and ends on the 10th of the present month.

2. No delay in billing statement: As per the RBI master direction, card issuers must ensure that bills and statements are sent on time so that consumers get enough days prior to the interest charged. RBI informed that to prevent repeated complaints of late invoicing, the issuer can propose issuing account statements and bills through mobile banking.

3. Cardholders will get a reply within 30 days from the date of complaint: The card issuers must ensure correct bill generation and verify that no wrong bills are distributed to cardholders. The issuers must provide a proper explanation if cardholders refuse a bill and also provide documentary evidence within 30 days of the complaint.

4. No charges until the dispute is resolved: RBI states that transactions that the cardholder disputes as fake or fraud will not be charged until the matter is resolved.

5. Option to change billing cycle: The cardholders will be provided with a one-time option to change the billing cycle of their cards in the view of enabling flexibility.

6. Refund amount will be adjusted to the payment due: The credit amount from reversed transactions and refunds prior to the payment due date for which the card owner has not payment date will be adjusted to the payment due.

7. Cardholder approval is a must to increase the credit limit beyond a set limit: It is important for the card issuers to get the consent of the cardholder before adjusting credit amounts beyond a cutoff of 1% Rupees 5000 or credit limit whichever is lower coming from failed transactions and refund for which the payment is already done. Within the time period of 7 days, permissions must be requested through SMS or e-mail.

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