The Reserve Bank of India (RBI) on April 21, 2022, issued its Master Directions on Issuance of Credit Cards and Debit Cards.
Salient features of RBI’s directions
- RBI asked card companies not to issue unsolicited credit cards or upgrade existing cards without the explicit consent of the customer, failing which they would be liable to pay double the amount billed as a penalty.
- Issue of unsolicited cards/up-gradation is strictly prohibited.
- These instructions will be effective from July 1, 2022.
- If an unsolicited card is issued or the existing card is upgraded and activated without the express consent of the recipient, the card issuer will have to refund the fee and pay a penalty twice the amount of the bill.
- Commercial banks with a net worth of more than Rs 100 crore can carry on credit card business either independently or in tie-up arrangements with other card-issuing banks/ NBFCs.
- Regional Rural Banks (RRBs) are also permitted to issue credit cards in collaboration with their sponsor bank or other banks.
- The person in whose name the card is issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card as per the provisions of the Ombudsman Scheme, for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him/her.
- Non-banking financial companies (NBFCs) shall not carry on the business of credit cards without its prior approval.
- With regard to the recovery of dues from customers, RBI has asked issuers to ensure that they and their agents adhere to the Fair Practices Code for Lenders.
- In particular, with regard to the appointment of third party agencies for debt collection, card issuers shall ensure that their agents avoid actions that may harm their integrity and reputation and adhere to strict customer confidentiality.
GS TIMES UPSC PRELIMS & MAINS CURRENT AFFAIRS BASED BASICS DAILY ONLINE TEST CLICK HERE
CLICK HERE DAILY CURRENT AFFAIRS QUIZ FOR STATE CIVIL SERVICES
