RBI Announces New Rules On Credit And Debit Card for Users

RBI Announces New Rules On Credit And Debit Card for Users
5 min read
21 Apr 2022

RBI's New Guidelines

The Reserve Bank of India announced new rules for RBI credit cards and debit cards on 21st April 2022. This set of guidelines will come into effect from 1st July 2022 and apply to all NBFCs and scheduled banks.

As a part of the latest guidelines, the RBI has allowed Scheduled Commercial Banks (SCBs) other than Regional Rural Banks (RRBs) to undertake credit card business only if they have a net worth of Rs. 100 crore. Additionally, scheduled banks can take up this business themselves or form a partnership with NBFCs or other card-issuing financial institutions.

Read through the following sections to get a detailed overview of the new credit and debit card rules.

New RBI Guidelines On Issuing Credit Cards

The following pointers detail the new RBI guideline for credit cards:

  • Banks cannot levy hidden charges on credit cards issued free of cost.
  • Card issuers can purchase insurance cover for liabilities arising due to loss of credit cards or credit card frauds. However, to facilitate this insurance cover, the issuer will have to take permission from the cardholder.
  • If an individual fails to activate the credit card within 30 days of issuance, OTP verification will be mandatory for its activation. This will help reduce cases where an unauthorised person tries to access a credit card before it reaches the hand of the actual user.
  • As per RBI credit card rules, credit reports about any cardholder must not reach credit bureaus like Experian, CRIF, CIBIL, etc., before the card's activation.
  • Banks must be transparent regarding the conversion of credit card transactions into EMIs. They should mention the principal amount, interest rate, additional charges, and more details.
  • The monthly statements or bills must separately include details related to EMI conversions.
  • RBI's new guidelines instruct all credit card issuers to mention the reason for the rejection of every credit card application.
  • The card issuer's responsibility is to close any request for an existing credit card within 7 seven working days. In case of failure to do so, the card issuer may have to pay Rs. 500 per day as a penalty to the cardholder.
  • Any changes regarding credit card charges shall be intimated to the cardholder before 30 days of implementation
  • If a credit card is inactive for a year, the issuing body can initiate its closure with a 30-day notice to the cardholder.
  • There should be no change in the card holder's credit card limit without their explicit consent.

With each passing year, where other insurance premiums tend to rise, car and bike insurance have a beneficial NCB, bringing down premium amounts.
No Claim Bonus is simply a perk given to policyholders for not making a claim in previous years. NCB in motor insurance can fetch up to a 20-50% discount on the payable premium amount by maintaining a claim-free record. NCB is not related to the make or age of the vehicle but solely on the claim record of the policyholder.
While purchasing a comprehensive motor insurance policy, you are generally not eligible for NCB unless in the case of NCB transfer. The policyholder will be eligible for NCB on the first renewal of the motor insurance policy, starting from 20%. This is applicable only if no claims have been made in the preceding years. The discount increases with every claim-free year up to a maximum of 50% at the end of five claim-free years.

New RBI Guidelines On Issue Of Debit Cards

Go through the following pointers to learn about the new RBI guidelines for debit cards:

  • Only those customers with savings or current accounts in banks are eligible to obtain a debit card.
  • Banks must not force a customer to take a debit card and shall not link this card to obtain any other facility from the bank.
  • As per the latest RBI debit card rules, individuals holding cash credits or loan accounts are not eligible to obtain a debit card. But, banks are allowed to link a debit card with the overdraft facility provided with the Pradhan Mantri Jan Dhan Yojana account.

Card Protection Plan For Debit And Credit Cards

You must be thoroughly aware of the new RBI credit card and debit card rules as a cardholder. You need to protect these cards against theft, loss, or fraud.

You can purchase a Card Protection Plan (CPP) to protect your cards against unforeseen circumstances for your card security. Note that this insurance plan is not just limited to credit and debit cards. You can also avail of coverage benefits for your identity cards, such as PAN and Aadhaar cards.

The Bajaj Finserv Wallet Care plan lets you block all payment cards with a single phone call and provides travel assistance if you lose your wallet while travelling. It comes with Rs. 2 lakh coverage against a nominal yearly premium of just Rs.699.

Additionally, you can also obtain benefits like emergency travel assistance, SIM card blocking, PAN card replacement and more along with the plan.


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