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RBI Guidelines: Companies will not be able to issue cards without reason, will have to pay double the billing amount as fine

RBI Guidelines: Sometimes it happens that companies issue credit cards without application or upgrade existing cards without explicit consent. RBI has been strict on such activities.

RBI Guidelines: Sometimes it happens that companies issue credit cards without application or upgrade their existing cards without the explicit consent of the customers. The central bank RBI has taken a strict stand on such activities and has prohibited companies/banks from doing so and directed that they will have to pay double the billing amount as penalty for doing so.

RBI has strictly prohibited the issuance or upgrade of cards without application in Master Directions on credit cards and debit cards and these instructions will be effective from July 1, 2022. Apart from this, RBI has asked card issuing companies or third party agents not to harass customers for recovery of dues.

RBI Ombudsman will decide the compensation

In case the card issuing company/bank does not respond satisfactorily within one month after the complaint is lodged, the person in whose name the card is issued may make a complaint to the Ombudsman of RBI as per RBI’s master instructions. In case of non-application card issuance, RBI will decide the amount of compensation under the provisions of the Ombudsman Scheme and the same will be paid by the card issuing company. While deciding the compensation, the time, expense, harassment and mental stress of the complainant will be taken into account.

These guidelines have been issued for banks to issue credit cards

As per RBI’s master instructions, commercial banks having a net worth of more than Rs 100 crore can undertake credit card business either independently or in association with other card issuing banks or NBFCs. Apart from this, Regional Rural Banks (RRBs) have also been allowed to issue credit cards in association with their sponsor banks or other banks. NBFCs shall not issue debit cards, credit cards, charge cards or any other such product without prior approval of RBI. (Input: PTI)

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