The Reserve Bank of India (RBI) on Thursday issued ‘Master Direction – Credit Card and Debit Card – Issuance and Conduct 2022.’ The directions, which will come into effect from July 1, will cover the general and conduct regulations relating to credit, debit and co-branded cards.
The new guidelines relating to credit cards shall apply to every Scheduled Bank (excluding Payments Banks, State Co-operative Banks and District Central Cooperative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India.
Similarly, the provisions relating to debit cards shall apply to every bank operating in India.
Key Highlights:
Credit Card Business:
-Scheduled Commercial Banks (SCBs) other than Regional Rural Banks (RRBs) with net worth of Rs 100 crore and above are permitted to undertake credit card business either independently or in tie-up arrangement with other card issuing banks/NBFCs with the approval of their Boards.
- Non-Banking Financial Companies registered with the Reserve Bank shall not undertake credit card business without prior approval of the Reserve Bank.
- Without obtaining prior approval from the Reserve Bank, NBFCs shall not issue debit cards, credit cards, charge cards, or similar products virtually or physically.
Issue of Credit Cards:
-Card-issuers shall provide a one-page Key Fact Statement along with the credit card application containing the important aspects of the card such as rate of interest, quantum of charges, among others.
-In case of rejection of a credit card application, the card-issuer shall convey in writing the specific reason/s which led to the rejection of the application.
- Card-issuers may consider introducing, at the option of the customers, an insurance cover to take care of the liabilities arising out of lost cards, card frauds, etc.
- The issue of unsolicited cards/upgradation is strictly prohibited.
-Card-issuers shall seek One Time Password (OTP) based consent from the cardholder for activating a credit card, if the same has not been activated by the customer for more than 30 days from the date of issuance.
Issue of Debit Cards:
-Debit cards shall only be issued to customers having Savings Bank/Current Accounts.
- No bank shall issue debit cards to cash credit/loan account holders. However, it will not preclude the banks from linking the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana accounts with a debit card.
- Banks shall not force a customer to avail debit card facility and shall not link issuance of debit card to availment of any other facility from the bank.