The Reserve Bank of India (RBI) has issued comprehensive guidelines in the form of Master Direction (MD) on Credit Card and Debit Card – Issuance and Conduct Directions, 2022, aiming to ensure fair practices and protect consumers’ interests. The Following Frequently asked questions (FAQs) regarding these guidelines provide clarity and understanding about the guidleines:
Query 1: What should a customer do if a credit card is issued without his/her consent (unsolicited card)?
Unsolicited issuance of credit cards is prohibited, and card issuers are mandated to obtain explicit consent from customers before issuing a card. In the event of receiving an unsolicited card, customers should refrain from activating it and immediately notify the card issuer. The issuer is obligated to close the credit card account without any cost to the customer within seven working days upon confirmation from the customer. Additionally, customers can file a complaint with the card issuer and escalate it to the RBI Ombudsman if necessary.
Query 2: Can a card be issued to other loan accounts such as overdraft facility, cash credit facility, working capital loan, etc.?
Yes, the MD allows for the issuance of credit cards linked to various loan accounts, enabling customers to access funds as per the terms and conditions of the respective loan facility. This includes overdraft facilities, cash credit facilities, working capital loans, etc. However, debit cards cannot be issued against such loan accounts.
Query 3: What can be considered as activation of a credit card?
Activation of a credit card involves any customer-initiated process indicating an intent to use the card, such as PIN generation, modifying transaction controls, or contacting customer support through recorded calls or SMS. If a card remains inactive for more than 30 days from the issuance date, the issuer must seek OTP-based consent from the cardholder.
Query 4: Can a credit card be considered ‘used’ even if no financial transactions have been undertaken?
Yes, besides financial transactions, any activity initiated by the cardholder, such as generating statements or changing PINs, qualifies as card usage. However, mere calls to customer support for non-transactional purposes do not count as card usage.
Query 5: Can consent for activation and closure of a business credit card be obtained from the corporate/business entity instead of the cardholder?
For business credit cards, consent for activation and closure must be obtained from the principal account holder, i.e., the corporate or business entity, unless specified otherwise in the agreement. Similarly, for retail credit cards, consent is required from the principal cardholder, not the add-on cardholders.
Query 6: In case of partial payment, can the card issuer charge interest/late payment fees on the total amount due?
If a cardholder fails to clear the total amount due by the payment due date, interest and late payment fees are levied only on the outstanding amount, not on the total due. This ensures fairness and transparency in fee assessment.
Query 7: Can a credit card issuer levy interest on unpaid taxes/levies/charges?
No, card issuers are prohibited from charging interest or other fees on unpaid taxes, levies, or charges. This regulation aims to protect consumers from unnecessary financial burdens and ensure transparent billing practices.
