Credit Card New Rules: RBI issues New Rules related to Credit Cards and Debit Cards, to be applicable from July 1, Know 10 important updates

In what comes as a major relief for the customers across India who are bombarded and misled by Credit Card Issuers on a regular basis, The Reserve Bank of India (RBI) has made changes in the issuance of credit cards and debit cards and other rules related to it. With the arrival of these new rules, it is expected that now the use of credit cards and debit cards will be more secure than before. Many times people are issued cards despite not applying or sometimes the cards get upgraded without their explicit consent. A unique narrative about the new credit card rules is that now the banks issuing credit cards and debit cards will not be able to mislead the customers.

According to the new rules, issuance or up-gradation of cards without consent has been banned. If the card is issued without consent or the existing card is upgraded and activated without the recipient's approval and is billed for it, the card issuer will not only have to refund the money but also the recipient without any delay. A fine of twice the value of the fee refunded will also be payable.

The person in whose name the card is issued can also approach the Ombudsman of the Reserve Bank of India. The Ombudsman will decide the amount of the fine as per the provisions of the scheme.

The Card issued or the other products/services offered with the Card require the written consent of the Customer. In addition, card-issuers can use other digital modes along with multi-factor authentication for customer consent.

There have been cases where a card issued in the name of a person did not reach them and was misused. It is emphasized that any loss arising out of misuse of such cards without consent shall be solely the responsibility of the card issuer and the person in whose name the card is issued shall not be liable for the same.

The Card-Issuer shall obtain One Time Password (OTP) based consent from the Cardholder to activate the Credit Card if the same is not activated by the Customer for more than 30 days from the date of issue of the Card. If no consent to activate the card is received, the Card Issuer shall close the Credit Card Account at no cost within seven working days from the date of receipt of confirmation from the Customer.

Card issuers will provide a one-page key-fact statement along with the credit card application, which will include key card aspects such as interest rate, charges, and other information. In the event of a credit card application being rejected, the card issuer will have to explain in writing why the application was rejected.

The Most Important Terms and Conditions (MITC) should be highlighted and sent separately to the customers. MITC will be provided to the customer at the time of onboarding.

Card issuers may consider introducing insurance cover for customers for liabilities arising out of lost cards, or card fraud.

No card issuer shall report any credit information relating to the new credit card account to the credit information companies prior to the activation of the card. The card-issuers shall ensure that the telemarketers they employ follow the instructions issued by the Telecom Regulatory Authority of India (TRAI) from time to time. The representative of the card issuer will contact the customers only between 10:00 am to 19:00 am.