Reserve Bank of India: The Reserve Bank of India (RBI) on Thursday prohibited banks from issuing credit cards or increasing the limit of existing cards or introducing other facilities without the approval of customers. If it is not followed, the companies concerned will have to pay double the amount of the bill as fine.
The central bank has also prohibited intimidation or harassment by card issuing entities or third parties acting as agents for collection of dues from customers. In its ‘Master’ guideline regarding credit cards, RBI said, “It is absolutely forbidden to issue cards or increase its limit or provide other facilities without the approval of the customer.” This guideline will come into effect from July 1, 2022.
RBI gave this big information
The apex bank said that if the card is issued without the approval of the customers or the existing card is upgraded, the card issuer will have to refund the charges and pay the penalty. This penalty will be double of the bill amount. As per the ‘Master’ guideline, commercial banks with a net worth of Rs 100 crore can undertake credit card business independently or in tie-up with card issuing banks/Non-Banking Financial Companies (NBFCs).
Regional Rural Banks are also permitted to issue credit cards in tie-up with their sponsor or other banks. “In addition, the person in whose name the card is issued can make a complaint to the RBI Ombudsman,” the central bank said. The Ombudsman will decide the amount of the penalty….” RBI has clarified that NBFCs will not start credit card business without its approval. The central bank also said that banks will not compel customers to take debit card facility. Also, taking a debit card will not be linked with the benefit of other services. RBI has also prohibited card issuing entities or third parties acting as agents from intimidating or harassing customers for collection of dues.