The revised set of guidelines published by the Reserve Bank of India (RBI) for the issue of credit cards and debit cards will come into effect from July 1.
The Reserve Bank of India on Thursday announced new rules for the issue of credit cards and debit cards, as well as directions to issuing agencies. The new rules – a detailed version of which can be found <strong>here</strong> – will come into effect from July 1. “These directions cover the general and conduct regulations relating to credit, debit and co-branded cards… (and) these Directions relating to debit (and credit) cards shall apply to every bank operating in India.”
On issue of credit cards
- Issue of unsolicited cards, or unsolicited upgrading of cards is strictly prohibited. In case an unsolicited card is issued, or an existing card is upgraded and activated, without the customer’s explicit consent (a bill is generated) the card-issuer shall not only reverse charges but also pay a penalty amounting to twice the value of the charges reversed.
- The cardholder can also approach the RBI which will determine compensation payable based on loss of time, expenses incurred, and harassment or mental anguish.
- In case of misuse of such unsolicitied cards (before reaching those in whose names it was issued) the card-issuer will fully and wholly be held responsible.
- Consent for the issue of cards must be explicit; written consent is needed before a credit card can be issued. If written consent is not possible, digital means like multifactor authentication can be used but must be communicated to the Reserve Bank of India.
On issue of debit cards
- Debit cards shall only be issued to customers having savings bank or current accounts.
- Banks shall not force a customer to avail debit card facility and shall not link issuance of debit card to availment of any other facility from the bank.
On loss of card (credit or debit)
- Card-issuer must block a lost card immediately after being informed.
- Card-issuers shall provide detailed information on how to report loss, theft or unauthorised use of a card or PIN. This must include multiple channels such as a dedicated helpline, dedicated number for SMS, dedicated e-mail-id, Interactive Voice Response, clearly visible link on the website, internet banking and mobile-app or any other 24×7 mode of reporting.
- Card-issuers shall immediately send a confirmation subsequent to the blocking of a card.
On general guidelines for issue of cards
- In case a card is blocked at the request of the customer, a replacement card can only be issued with the explicit consent of the customer. Further, the card-issuer must obtain explicit consent of the cardholder prior to the renewal of an existing card.
- Terms and conditions for issue and use of a card shall be mentioned in clear and simple language – preferably in English, Hindi and the local language.
- The convenience fee, if any charged on specific transactions, shall be indicated to the cardholder in a transparent manner, prior to the transaction.
- The terms shall clearly specify the time-period for reversal of unsuccessful or failed transactions, and the compensation payable for failure to meet the specified timeline.
- The terms may be altered by the card-issuer, but 30 days’ notice of the change shall be given to the cardholder to enable the customer to withdraw if they wish to.
- Card-issuers shall put in place a mechanism and give wide publicity. The name, direct contact number, email-id and postal address of the designated grievance redressal officer must be mentioned on the credit card bills and account statements. The designated officer shall ensure that grievances of cardholders are redressed promptly without delay.
- Card-issuers shall ensure call centre staff is trained to handle and escalate a complaint, if necessary. There must be a system of acknowledging customers’ complaints for follow up, such as complaint number or docket number, even if complaints are received over phone.
- Card-issuers shall be liable to compensate the complainant for loss of time, expenses, financial loss, as well as for the harassment and mental anguish suffered for fault of the card-issuer and where the grievance has not been redressed in time. If a complainant does not get satisfactory response from the card-issuer within one month from the date of lodging the complaint, they can approach the RBI for redressal of grievances.
On confidential customer information
- Card-issuers shall not reveal any information relating to customers without obtaining their explicit consent. Customers must be told of the purpose for which the information will be used and the organisations with whom the information will be shared.
- Information sought from customers cannot violate provisions of law relating to maintenance of secrecy in transactions. The card-issuers shall be solely responsible for the correctness or otherwise of the data provided for the purpose.