Reserve Bank of India: The Reserve Bank of India (RBI) on Thursday banned banks from issuing credit cards or raising existing card limits or introducing other benefits without the approval of customers. If not, the company will have to pay double the bill as penalty.
The central bank prohibits intimidation or harassment by third parties acting as card issuing agencies or agents to collect arrears from customers. In its ‘Master’ Guidelines on Credit Cards, the RBI said, “It is strictly forbidden to issue a card or extend its limit or provide other benefits without the approval of the customer.” This guideline will be effective July 1, 2022.
The RBI gave this big information
The Supreme Bank has said that if a card is issued without the approval of the customer or the existing card is upgraded, the card issuer will have to refund the charge and pay a penalty. This fine will double the amount of the bill. According to the ‘Master’ guidelines, commercial banks with a net worth of Rs 100 crore can conduct credit card business independently or by tying up with card issuing banks / non-banking financial institutions (NBFCs).
Regional Grameen Banks are allowed to issue credit cards by tying up with their sponsors or other banks. “Besides, the person in whose name the card was issued can lodge a complaint with the RBI ombudsman,” the central bank said. The RBI has made it clear that NBFCs will not start credit card business without the approval of the NBFCs. The central bank also said that banks will not force customers to avail debit card facility. RBI prohibits third parties acting as card issuing agencies or agents from intimidating or harassing customers to collect arrears.
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