What are new Guidelines issued by RBI on Issuance of Credit and Debit Cards?

On 21st April 2022, the Reserve Bank of India (RBI) issued a fresh set of guidelines for the issuance of debit and credit cards. These newly issued guidelines will come into effect from July 1 2022 and will be applicable to all banks except state cooperative banks, payments banks, and district central cooperative banks. These norms have been issued with the aim of protecting the interests of the country’s retail consumers.

Guidelines on credit cards

The issuance of unsolicited cards or the unsolicited card up-gradation is strictly prohibited. In case an existing card is upgraded and activated or an unsolicited card is issued without the consent of the customer, the card issuer will have to reverse the charges and will also have to pay a penalty twice the value of the reversed charges. In case the unsolicited cards are misused before reaching the customer in whose name it was issued, the issuer of the card will be fully held responsible. The consent for card issuance must be explicit and written consent must be needed before the issuance of a credit card. If there is no means for written consent then digital means must be used and must be communicated to the RBI. The third-party agents as well as the card issuers are not allowed to intimidate or harass someone during the recovery of dues.

Guidelines on debit cards

Debit cards will only be issued to those customers having current or savings bank accounts. Banks will not be able to force a customer to avail of the debit card facility and must not link debit card issuance to avail of any other services or facilities from the bank.

Guidelines regarding loss of cards

The issuer of the card must block a card that is lost immediately after being informed. The issuers must also provide detailed information regarding reporting of loss, unauthorised use of a card or PIN, and theft. This must include multiple channels like a dedicated number for SMS, a dedicated helpline, Interactive Voice Response, a dedicated e-mail-id, a clearly visible link on the website, mobile app, internet banking or any other 24×7 mode of reporting. The card issuers must send a confirmation immediately after the blocking of a card.

General guidelines issued

In case a customer requests that a card of theirs be blocked, a replacement card must only be issued after receiving the explicit consent of the customer. Further, the issuer of the card must also obtain consent from the cardholder before renewing an existing card. The terms and conditions for the use and issuance of a card must be mentioned in simple and clear language preferably in the local language, English, and Hindi. Any convenience fee charged must be indicated to the cardholder in a transparent manner prior to the transaction being done. The terms must specify clearly the period of time for the reversal of failed and unsuccessful transactions and the compensation that must be paid in case of failure to meet the specified time period. The terms can be altered by the card issuer, but a prior 30 days’ notice of change must be provided to the cardholder so that they can withdraw if they choose.

Guidelines on grievances

The card issuers shall put in place a grievance mechanism and it must be publicised widely. The name, email-id, direct contact number, and postal address of the grievance redressal officer must be mentioned by the card issuer on the account statements and credit card bills. The designated grievance officer must ensure that the grievances received are promptly redressed without delay. The issuers of the card must also ensure that the staff of the call centre are trained to escalate and handle a complaint. A system to acknowledge and follow up on the complaints of the customers must be put in place, like a docket number or complaint number even if the complaints are received via phone. The card issuers will be liable to compensate the complainant for any expenses, loss of time, financial loss, as well as for the mental anguish and harassment suffered for any fault of the issuer and non-redressal of the grievance on time. Also, if a complainant does not receive a satisfactory response within a month from the date of lodging the complaint, the person can approach the RBI for grievance redressal.

Guidelines regarding confidential customer information

The issuers of the card will not reveal any customer-related information without obtaining their consent. The customers must be informed regarding the purpose for which the said information will be used, as well as the organisations with which the information will be shared. The information that is obtained from the customers must not violate law provisions relating to the maintenance of transaction secrecy.

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