RBI Extends Deadline to Implement New Rules to October 1; Know the Changes


The Reserve Bank of India (RBI) on Tuesday extended the timeline to implement various provisions related to credit card issuance till October 1. Earlier, the deadline was set at July 1. “Considering various representations received from the industry stakeholders, it has been decided to extend the timeline for implementation of the following provisions of the Master Direction to October 01, 2022,” the RBI said in a statement on June 21.

Deadline for these Key Changes has been Extended

If a customer does not activate a credit card within 30 days of issuance, the banks or card-issuers must seek a one-time password from the user to activate the card. If customer does not provide consent for activating the card, the issuer should close the card within seven working days without any extra cost.

Card issuers must ask for explicit consent before increasing the credit limit on a credit card. “Card-issuers shall ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder,” RBI mentioned.

Moreover, the terms and conditions for payment of credit card dues, including the minimum amount due, shall be stipulated, the Reserve Bank of India said. This was to ensure there is no negative amortisation. An illustration is included in the Annex. “The unpaid charges/levies/taxes shall not be capitalised for charging/compounding of interest,” the regulator said.

“The stipulated timeline for implementation of rest of the provisions of the Master Direction remains unchanged,” RBI added.

Credit Card Rules to Change from July 1

Earlier in April, the Reserve Bank of India released a set of guidelines need to be followed by the card-issuers while issuing debit or credit cards. The new rules will be effective from July 1. Known as the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, it also includes instructions regarding billing and closure of credit cards. The provisions 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.

The regulator said that the billing cycle for your credit card will start on the 11th of the previous month and end on the 10th of the current month if your credit card statement is generated on the 10th of every month. Moreover, there should not be any delay in billing statement of the credit card. Card issuers must ensure that bills/statements are sent, emailed promptly, and that the consumer has a sufficient number of days, at least one fortnight to pay before interest is charged, according to the RBI.

“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,” the RBI said.

Read all the Latest News , Breaking News , watch Top Videos and Live TV here.


Source link