RBI issues New Guidelines for Credit Cards
The Reserve Bank of India (RBI), India’s central bank, amid the increase in usage and adoption of credit cards in India, has announced a new set of guidelines to protect consumers from fraud and hidden charges, including others things. Reserve Bank issued these guidelines as lately, credit cards popularity has skyrocketed after the COVID-19 pandemic. The total outstanding credit cards in December 2019 stood at 55 million, which has now increased to nearly 72 million at the end of February 2022.
Here are some of the major highlights of guidelines issued by the Reserve Bank of India related to credit cards-
No hidden charges on credit cards issued free of charge.
Now, card issuers can consider an insurance cover for liabilities arising out of lost credit cards, or credit card frauds. However, the issuer will have to obtain explicit permission from the card holder for this.
Now the customer will be required to enter a one-time password to activate their credit card that has not been activated within 30 days from the date of issuance. This will assist in handling situations where an unauthorized person intercepts cards before their delivery to the customer.
RBI guidelines also state that cardholders’ credit information will not be reported to any credit bureaus like Cibil, CRIF, Experian, etc., before the activation of their card.
EMI conversion with interest shall not be masked as no-cost or zero-interest EMI.