From July 1, new rules regarding your credit cards will come into place, including those regarding issuance, billing and closure of your cards. The new credit card rules will apply to Scheduled Bank (excluding Payments Banks, State Co-operative Banks and District Central Co-operative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India. The central bank has issued the directions under the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022. Under the new credit card rules, the RBI has issued guidelines regarding issue, billing and closure of cards that is aimed to help the common man.
Here are the credit card rules that will come into effect from July 1
Credit Card Companies Cannot Issue Unsolicited Credit Cards
The RBI has strictly prohibited the issue of unsolicited credit cards in its new credit card rules. “In case, an unsolicited card is issued/existing card upgraded and activated without the explicit consent of the recipient and the latter is billed for the same, the card-issuer shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed,” said the RBI. In addition, the person under whom the credit card has been issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card. There shall not be any hidden charges while issuing credit cards free of charge.
Hefty Penalty for Non-Closure of Credit Card Despite Request
Credit card-issuers will have to honour any request from cardholders to close their credit cards, within seven working days, the RBI has said. Subsequent to the closure of credit card, the cardholder must be immediately notified about the closure through email, SMS, etc, the RBI has said in its guidelines. “Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of Rs 500 per day of delay payable to the customer, till the closure of the account provided there is no outstanding in the account,” the RBI said.
Credit Balance to be Credited to Cardholder’s Account
If there is credit balance in the cardholder’s account, the same shoulf be credited to their bank account as per the new rules. “Subsequent to closure of credit card account, any credit balance available in credit card accounts shall be transferred to the cardholder’s bank account. Card-issuers shall obtain the details of the cardholder’s bank account, if the same is not available with them,” said the RBI.
Choose Your Credit Card Billing Cycle
A billing cycle of a credit card is defined as the time frame in which a credit card bill is generated. From July 1, your credit card billing cycle will begin on the 11th day of the previous month and end on the 10th day of the current month, the RBI guideline has mentioned. “Card-issuers do not follow a standard billing cycle for all credit cards issued. In order to provide flexibility in this regard, cardholders shall be provided a one-time option to modify the billing cycle of the credit card as per their convenience,” the RBI has said.
Credit Card Companies Cannot Send Wrong Bills
Apart from these rules, credit card companies cannot send you wrong bills. “In case, a cardholder protests any bill, the card-issuer shall provide explanation and, wherever applicable, documentary evidence shall be provided to the cardholder within a maximum period of 30 days from the date of complaint,” said the RBI notifying the new credit card rules.
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