RBI Puts Penalty on Issuance of Unsolicited Credit Cards,

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Friday, 22 April 2022

RBI Puts Penalty on Issuance of Unsolicited Credit Cards,

If you are a branch manager or marketing officers with banks, you must know the new rules of RBI , which is going to be introduced by 01st July 2022 for Credit Card Issuance.  As per new rules of Credit Card Issuance,  bank or issuer will be penalized for issuance of unsolicited credit cards or upgrade an existing card without the explicit consent of the customer. Failing which they will have to pay double the billed amount as penalty. It means the customer signed forms or consent must be available with the issuer.

It has been seen that many of the banks are issuing and upgrading the Credit Cards of the customer without their consent, just to reach their targets. The new rules by RBI may put curb on this menace.



The Major Do's & Don't of New Credit Card Rules by RBI

  1. All these rules will be effective from 01st July 2022.
  2. Losses due to unsolicited cards shall be the responsibility of the issuer.
  3. Customers may approach to RBI Ombudsman if they receive any Unsolicited Cards.
  4. There should not be any capitalization of Penalties, Charges  for compounding of interest.
  5. In case of Unsolicited Credit Card Issuance, the card-issuer shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed.
  6. Card-issuers shall 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 shall close the credit card account without any cost to the customer within seven working days from date of seeking confirmation from the customer.
  7. Banks have also been forbidden from sharing any information with credit information companies prior to activation of the card. Any credit information relating to such inactivated credit cards already reported to credit information companies shall be withdrawn immediately.
  8. Card-issuer’s representatives can contact customers only between 10 am and 7 pm.
  9. Banks have to honor request for closure of a credit cards, immediately notifying the customer of the closure through email, SMS, etc.
  10. Customers have to be given multiple channels such as helpline, dedicated email-id, Interactive Voice Response (IVR), prominently visible link on the website, internet banking, mobile-app or any other mode to close their cards and cannot insist on any channel.
  11. Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of Rs 500 per day of delay payable to the customer, till the closure of the account provided there is no outstanding in the account.
  12. If a credit card has not been used for a period of more than one year, the process to close the card shall be initiated after intimating the cardholder.

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