New credit card rules: These rules will be effective from July 1, 2022

The Reserve Bank of India (RBI) issued new criteria for credit and debit card issuance via a notification on April 21, 2022. These include new restrictions addressing credit card cancellation, billing, and so forth.

“Every Scheduled Bank (with the exception of Payments Banks, State Co-operative Banks, and District Central Cooperative 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,” stated the RBI notification.

From July 1, 2022, these regulations will come into force.

No delay in credit card billing statement

According to the RBI master guidance, card issuers must make sure that bills/statements are provided quickly through email and that customers have enough time to pay—at least one fortnight—before interest is levied.

The RBI said, “In order to avoid repeated complaints about late invoicing, the card issuer may propose issuing bills and account statements via internet/mobile banking with the cardholder’s informed authorization. Card issuers must implement a system to ensure that the cardholder receives the billing statement.”

Response 30 days of filing a complaint

Within 30 days of the date of the complaint, the card issuer must respond to a cardholder who disputes a charge with an explanation and, if necessary, documentary support.

Option to choose credit card billing cycle

The issuers of all credit cards do not adhere to a standard billing cycle. Cardholders will have a one-time option to customise the credit card’s billing cycle in order to allow flexibility in this area.

Refund amount will be adjusted to reflect the amount owed

Before the payment due date, any credit amount resulting from refunds, unsuccessful, reversed, or similar transactions for which the cardholder has not made payment will be adjusted to the “payment due” and communicated to the cardholder.

Credit card closure rules

The customer must be immediately notified of the closure via email, SMS, etc. by the bank in order for it to honour requests to close a credit card. Customers must be provided various options, such as a helpline, dedicated email address, Interactive Voice Response (IVR), a link that is clearly accessible on the website, internet banking, a mobile application, or any other method, to close their cards; they cannot insist on a certain route.

“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,’ stated the RBI.

Card cancellation within seven days

The credit card issuer is mandated by the master directive to comply with any request to cancel a credit card within seven business days, provided that the cardholder has paid all outstanding balances.

It should be noted that if a bank or NBFC doesn’t cancel an account within seven working days, there would be a penalty of Rs. 500 each day until the account is closed, presuming there are no unpaid balances.

According to the master direction, “The card-issuer shall not insist on sending a closure request through post or any other means which may result in the delay of receipt of the 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”

Credit closure if unused

If a credit card is not used for more than a year, the bank may close it.

A credit card holder will be informed and the process to cancel the card will be started if it hasn’t been used for more than a year. The card issuer will deactivate the card account if the cardholder doesn’t react within 30 days, provided that the cardholder has paid any outstanding balances.

Credit balance available to be transferred to bank account

After the account is cancelled, any credit balance that remains in the cardholders’ accounts will be transferred to their bank account. Card issuers must get access to the cardholder’s bank account information if they don’t already have it.