Credit card, debit card holders alert! RBI extends important guideline to October 1
Banks and non-banking financial companies (NBFCs) were to implement the Master Direction on 'Credit Card and Debit Card ? Issuance and Conduct Directions, 2022' from July 1.
Mumbai: The Reserve Bank on Tuesday gave three more months to banks and NBFCs issuing credit and debit cards to comply with certain norms including activation of cards without consent of customers.
Banks and non-banking financial companies (NBFCs) were to implement the Master Direction on 'Credit Card and Debit Card' Issuance and Conduct Directions, 2022' from July 1.
In view of various representations received from the industry stakeholders, the Reserve Bank of India (RBI) has decided to extend the timeline for implementation of certain provisions of the Master Direction to October 01, 2022, according to a circular issued by the central bank.
One of the provisions on which more time has been given relates to activation of credit card.
As per the Master Direction, card issuers must seek One Time Password (OTP) based consent from the cardholder for activating a credit card, if the same has not been activated by the customer for more than 30 days from the date of issuance.
If no consent is received for activating the card, card issuers should close the credit card account without any cost to the customer within seven working days from date of seeking confirmation from the customer.
Further, card issuers were asked to ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point of time without seeking explicit consent from the cardholder by July 1.
In this case also, they have now been given time till October 1.
The RBI has also postponed implementation of a norm related to unpaid charges and compounding of interest by three months.
As per the Master Directions, there should be no capitalisation of unpaid charges/levies/taxes for charging/ compounding of interest.
However, the stipulated timeline of July 1 for implementation of rest of the provisions of the Master Direction remains unchanged, the central bank said.