RBI Issued New Rules for Credit, Debit and Co-Branded Cards Will be Effective from July 1, 2022

BANKING AND ECONOMY

A set of new rules were issued by the Reserve Bank of India (RBI) for the issue of credit cards and debit cards. Also, new directions were issued for the credit cards and debit card issuing agencies. These new rules will be effective from July 1, 2022.

These directions cover the general and conduct regulations relating to credit, debit and co-branded cards. These new rules are to be followed by all the banks and NBFCs which have been permitted by RBI to issue credit cards.

Scheduled Commercial Banks (SCBs) with a net worth of Rs 100 crore and above are permitted to undertake credit card business.

      Following are the new regulations issued by the RBI;

  • Issue of unsolicited credit cards or unsolicited upgrading of cards is strictly prohibited without the customer's explicit consent.
  • The card-issuer is fully and wholly responsible, in case of misuse of such unsolicited cards.
  • The recovery of dues by the third-party agencies should be done in a respectful manner. It should be ensured by the card issuer.
  • Debit cards shall only be issued to customers having savings bank or current accounts.
  • In case of loss of card, the Card-issuer must block a lost card immediately after being informed.
  • In case a card is blocked at the request of the customer, a replacement card can only be issued with the explicit consent of the customer.
  • 30-days prior notice to be given by the card issuer to its customer in case of change in terms and conditions.

    Important points for the exam:

  • A set of new rules were issued by the Reserve Bank of India (RBI) for the issue of credit cards, debit cards and card issuing agencies.
  • Scheduled Commercial Banks (SCBs) with a net worth of Rs 100 crore and above are permitted to undertake credit card business.
  • These new rules will be effective from July 1, 2022.
  • The recovery of dues by the third-party agencies should be done in a respectful manner. It should be ensured by the card issuer.
  • Debit cards shall only be issued to customers having savings bank or current accounts.
  • In case of loss of card, the Card-issuer must block a lost card immediately after being informed.

   Facts to know:

  • The Monetary Policy Committee of RBI was established in 2016.
  • Governor OF RBI: Mr.Shakthikanda Das.
  • It is a member bank of the Asian Clearing Union.
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