New rules for debit and credit cards: The Reserve Bank of India (RBI) issued new criteria for credit and debit card issuance in April this year.
These new rules will see fresh restrictions addressing credit card cancellation, billing, etc. Below are the three new rules of credit cards:
- Card-issuers to seek OTP
Card issuers will seek a One Time Password (OTP) based consent from the cardholder. It will help activate a credit card if it has not been activated by the customer for more than 30 days from the date of issuance.
And in case of no consent, card issuers will have to close the credit card account. But it will be without any costs.
- Credit limit approval
Card issuers will have to ensure that the credit limit as sanctioned to them is not breached at any point in time without seeking explicit consent from the cardholder.
- Rate of interest
“The terms and conditions for payment of credit card dues, including the minimum amount due, shall be stipulated so as to ensure there is no negative amortization. An illustration is included in the Annex. The unpaid charges/levies/taxes shall not be capitalized for charging/compounding of interest,” says RBI.
- Tokenisation of debit, and credit cards by September 30
RBI has made it mandatory for all credit and debit card data used in transactions to be replaced with unique tokens by September 30 for extra security.
Earlier, the deadline was extended by three months starting July this year.