Three new credit card rules changing from October 1; know details here
The Reserve Bank of India (RBI) issued new credit and debit card issuance criteria in April 2022. These new rules include new restrictions on credit card cancellation, billing, and other issues.
The Reserve Bank of India (RBI) announced new credit and debit card criteria in April 2022. The RBI's card-on-file (CoF) tokenisation regulations will go into effect on October 1, 2022, changing the rules for debit and credit card online payments. The new regulations should improve cardholders' ability to make payments.
Tokenisation guidelines had a July 1 deadline, but that date was pushed up three months to September 30. Large merchants have mostly already met the RBI's CoF tokenisation requirements.
Know the three new credit card rules here:
1) Card-issuers to seek One Time Password (OTP)
Card issuers should obtain One Time Password (OTP)-based consent from the cardholder before activating a credit card that the customer has not activated for more than 30 days from the date of issuance. In the absence of consent, card issuers must close the credit card account without charge to the customer within seven working days of requesting confirmation from the customer.
2) Credit-limit approval
Furthermore, card issuers must ensure that the credit limit sanctioned and advised to the cardholder is not exceeded at any time without the cardholder's explicit consent.
3) Rate of interest
When charging or compounding interest on credit cards, unpaid charges, levies, and taxes are not capitalised. "To ensure no negative amortisation, the terms and conditions for payment of credit card dues, including the minimum amount due, must be mentioned." An illustration can be seen in the Annex. According to the RBI's master circular, "unpaid charges/levies/taxes shall not be capitalised for charging/compounding interest."