The Reserve Bank of India (RBI) on Tuesday extended the timeline to implement several provisions related to credit card issuance until Oct. 1. Previously, the deadline was set for July 1. to extend the timeline for the implementation of the Master Direction’s next provisions to October 1, 2022,” the RBI said in a statement on June 21.
Deadline for these important changes has been extended
If a customer does not activate a credit card within 30 days of issuance, the banks or card issuers must ask the user for a one-time password to activate the card. If the customer does not authorize the card to be activated, the issuer must close the card within seven business days at no additional cost.
Card issuers must obtain explicit approval before increasing the credit limit on a credit card. “Card issuers will ensure that the credit limit as sanctioned and advised to the cardholder is not violated at any time without obtaining the express consent of the cardholder,” said RBI.
In addition, the terms of payment of credit card dues, including the minimum amount due, will be determined, the Reserve Bank of India said. This is to ensure that there are no negative depreciations. An illustration is included in the appendix. “The unpaid charges/duties/taxes will not be capitalized for charging/aggregating interest,” the regulator said.
“The established timeline for the implementation of the rest of the Master Direction provisions remains unchanged,” RBI added.
Credit card rules change from July 1th
Earlier in April, the Reserve Bank of India released a set of guidelines that card issuers must follow when issuing debit or credit cards. The new rules will come into effect from July 1. Known as the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, it also contains instructions related to billing and closure of credit cards. The provisions apply to any scheduled bank (excluding payment banks, state cooperative banks and district central cooperative banks) and all non-banking financial corporations (NBFCs) operating in India.
The regulator said the billing cycle for your credit card starts on the 11th of the previous month and ends on the 10th of the current month if your credit card statement is generated on the 10th of each month. In addition, there should be no delay in the credit card statement. Card issuers must ensure that bills/statements are sent and emailed promptly and that consumers have sufficient days, at least 14 days, to pay before being charged interest, the RBI said.
“To avoid repeated complaints about late billing, the card issuer may propose to issue bills and statements via internet/mobile banking with the cardholder’s informed consent. Card issuers must implement a system to ensure that the cardholder receives the statement of account,” the RBI said.
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