Indian Reserve Bank of India's New Guidelines for Credit and Debit Card Issuance and Usage

The Reserve Bank of India (RBI), the central bank of India, has recently introduced new guidelines for the issuance and usage of credit and debit cards. These guidelines are designed to protect consumers and ensure transparency, accountability, and fair practices in the issuance and usage of these cards. The new rules will come into effect from July 1, 2023.

Principles Guiding the New Guidelines

The RBI's aim with these new rules is to enhance consumer protection and promote responsible banking practices. Key principles include:

Explicit and clear consent is required for issuing credit and debit cards. Protection of consumers against misuse and unauthorized use of cards. Responsible recovery of dues without intimidation or harassment. Quick and transparent loss reporting and handling process. Communication of terms and conditions in a simple and transparent manner. Protection of cardholders from unfair changes in terms and conditions.

Details of New Credit Card Issuance and Usage Guidelines

Here are the detailed rules for credit cards:

Unsolicited Cards and Upgrading

The issuance of unsolicited credit or debit cards is strictly prohibited. If an unsolicited card is issued or upgraded without a customer's explicit consent, the card-issuer must reverse the charges and also pay a penalty. In case of misuse of unsolicited cards before the customer receives them, the card-issuer will be fully responsible. Consent for issuing cards should be explicit. Written consent is required before a credit card can be issued. If written consent is not possible, digital means can be used but must be communicated to the Reserve Bank of India. Issuers and third-party agents should avoid intimidating or harassing customers during debt recovery processes.

New Debit Card Issuance Guidelines

For debit cards:

Debit cards can only be issued to customers who hold savings or current accounts. Banks cannot force customers to use debit card facilities and must not link the issuance of debit cards to other banking services.

Handling Loss and Misuse of Cards

For both types of cards, the RBI has outlined specific procedures to handle loss and misuse:

Card-issuers must immediately block a lost or missing card after being informed. Card-issuers should provide detailed information on how to report loss, theft, or unauthorized use. This information should include multiple channels such as a helpline, SMS, email, and frequently accessible links on the website and mobile-app. A confirmation of the blocking process should be sent to the cardholder immediately.

General Guidelines for Credit and Debit Card Issuance

The RBI has also provided general guidelines for credit and debit card issuers:

Before issuing a new card, customers must provide explicit consent. A replacement card can only be issued with the cardholder's consent, and renewal of an existing card must also gain the cardholder's consent. The terms and conditions for issuing and using cards should be written in clear, simple language. It's preferred to use English, Hindi, or the local language. Convenience fees, if applicable, should be disclosed to the cardholder before a transaction. The terms and conditions should clearly outline the time-period for reversing unsuccessful or failed transactions and the compensation due if the specified timeline is not met. It is expected that any changes to the terms and conditions should be communicated 30 days in advance to allow cardholders to withdraw if they wish to do so.

For more details, visit the official RBI website. These guidelines aim to ensure a safer and more user-friendly environment for cardholders in India, promoting trust and confidence in the banking sector.