RBI's strictness: Penalty will be given for delay in closing credit cards, customers' approval will be required for these facilities

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Taking a tough stand, the Reserve Bank of India (RBI) has barred banks from issuing credit cards or introducing other facilities, including increasing the limit of existing cards, without the approval of customers. Disobeying this order can cost the companies a lot. In fact, for not complying with this, the companies concerned will have to pay double the amount of the bill as fine. Apart from this, the central bank has issued many more orders.

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Intimidation of customers will be costly
In its new order, the RBI has said that the card issuing companies or third parties acting as agents in them are now prohibited from intimidating customers about recovery of dues. In the new guidelines, RBI said that action will be taken against the company for issuing cards without the approval of the customer. These guidelines issued by the central bank will come into effect from July 1, 2022. Further, if the card closure request is not processed within a week, the card issuer will pay a fine of Rs 500 per day to the customer.

Penalty for delay in closing credit card
The provisions of these instructions relating to credit cards of the Reserve Bank of India shall be applicable to every scheduled bank (state co-operative bank and district central co-operative bank) and all non-banking financial companies (NBFCs) (except payment banks) operating in India. As per the instructions, delay in closing the credit card account will result in the card issuer paying a penalty to the cardholder. RBI said that commercial banks with a net worth of Rs 100 crore can start credit card business independently or in collaboration with card issuing banks / non-banking financial companies (NBFCs).

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Understand guidelines in five points

  1.     The credit card closure request should be completed within seven working days.
  2.     The closure should be immediately informed to the Cardholder through email, SMS.
  3.     The Company will not insist on sending the request for closure of the Credit Card by post or any other means.
  4.     If the credit card is not closed within seven working days, the company will pay a fine of Rs.500/day to the customer.
  5.     If the card is not in use for a period of more than one year, the company will be able to close it by informing the customer.