Credit Card Holders: Banks to Pay You Rs 500 Each Day if They Don’t Follow This Rule

Credit Card Rule Change: A host of new guidelines regarding the billing, issuance and closing of credit cards have come into effect from the beginning of this month. The Reserve Bank of India has introduced these new credit card rules to ensure better transparency between cardholders and the issuer, while also providing more security and sense of power to the customer. The RBI with master directions on issuance and operation of credit and debit cards earlier this year. The provisions relating to this under the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, have already come into effect.

“In exercise of the powers conferred by Sections 35A and Section 56 of the Banking Regulation Act, 1949 and Chapter IIIB of the Reserve Bank of India Act, 1934, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified,” the RBI stated in a release dated April 21.

What Has Changed Under the New Credit Card Rules?

Under the new master directions, the RBI has introduced a slew of new guidelines on how credit card issuers may operate. This includes changes in credit card closure, billing as well as issuance.

The provisions of these Directions relating to credit cards shall apply to every 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, it said.

Credit Card Closure Rule: Card Issuers to Pay Rs 500 Each Day for Violating This

Regarding the closure of credit card, the RBI has recommended a host of directions in its mandate. ” Any request for closure of a credit card shall be honoured within seven working days by the credit card-issuer, subject to payment of all dues by the cardholder,” the central bank said.

Among these mandates, the central bank has said that the card issuer will be liable to pay Rs 500 each day to the customer if it does not close his or her credit card within seven working days after raising a request.

“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.

“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,” it said.

Further, the RBI has made it clear that the card-issuer should not insist on sending a closure request through post or any other means which may result in the delay of receipt of the request.