From July 1, new rules in regard to credit cards will come into effect, including the issuance, cancellation, charging, and closure of the credit cards. The new rules will be applicable to Scheduled Banks (except Payments Banks, State Co-operative Banks and District Central Co-operative Banks) and all Non-Banking Financial Companies (NBFCs) working in India.
As per the notification by the Reserve Bank of India (RBI), "Every Scheduled Bank (with the exception of Payments Banks, State Co-operative Banks, and District Central Co-operative Banks) and all Non-Banking Financial Companies (NBFCs), operating in India are subject to the credit card-related provisions of the RBI (Credit Card and Debit Card - Issuance and Conduct) Directions, 2022."
Companies Cannot Issue Unsolicited Credit Cards
The RBI has rigorously denied the issue of unsolicited credit cards in its new guidelines. The RBI stated, "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."
Furthermore, an individual under whom the credit card has been given can likewise move toward the RBI Ombudsman who might decide how much amount is payable by the card issuer to the beneficiary of the unsolicited card.
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Request for closure of the credit cards to be responded to in seven days
As per the new rules by RBI, the card-issuers have to respond to the request made by cardholders for closure of the cards, within seven working days. Also, the cardholders should be immediately informed about the card closure via email, SMS, etc. On failing the process of closing the credit cards within seven working days, the card issuers will be penalized Rs 500 per day delayed. The penalized amount will be given to the cardholders who made the request.
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Cardholders to get the Credit Balance
In the event that there is a credit balance in the cardholder's record, the equivalent amount should be credited to their account according to the new laws. Resulting of credit card closure, any credit balance accessible in credit accounts will be moved to the cardholder's ledger. Card-issuers will acquire the subtleties of the cardholder's financial balance, in the event that the equivalent isn't accessible to them, said the RBI.
Cardholders can choose Billing Time
The card issuers don't stick to a standard charging cycle. In order to make it flexible, the cardholders get a one-time chance to customize the credit card's billing cycle as per their convenience.