The Reserve Bank of India has recently amended rules regarding credit and debit cards, including those relating to closure of credit cards. The central bank has come up with master directions on issuance and operation of credit and debit cards. The provisions relating to this under the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, will come into effect from July 1 this year.
“In exercise of the powers conferred by Sections 35A and Section 56 of the Banking Regulation Act, 1949 and Chapter IIIB of the Reserve Bank of India Act, 1934, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified,” the RBI stated in a release dated Thursday, April 21.
The provisions of these Directions relating to credit cards shall apply to every Scheduled Bank (excluding Payments Banks, State Co-operative Banks and District Central Co-operative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India, it said.
Regarding the closure of credit card, the RBI has recommended a host of directions in its mandate. ” Any request for closure of a credit card shall be honoured within seven working days by the credit card-issuer, subject to payment of all dues by the cardholder,” the central bank said.
Subsequent to the closure of credit card, the cardholder must be immediately notified about the closure through email, SMS, etc, the RBI has said in its guidelines. “Cardholders shall be provided option to submit request for closure of credit card account through multiple channels such as helpline, dedicated e-mail-id, Interactive Voice Response (IVR), prominently visible link on the website, internet banking, mobile-app or any other mode,” it said.
Further, the RBI has made it clear that the card-issuer should not insist on sending a closure request through post or any other means which may result in the delay of receipt of the request.
“Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of Rs 500 per day of delay payable to the customer, till the closure of the account provided there is no outstanding in the account,” the RBI said.
“Subsequent to closure of credit card account, any credit balance available in credit card accounts shall be transferred to the cardholder’s bank account. Card-issuers shall obtain the details of the cardholder’s bank account, if the same is not available with them,” it said.
If a credit card has not been used for a period of more than one year, the process to close the card shall be initiated after intimating the cardholder. If no reply is received from the cardholder within a period of 30 days, the card account shall be closed by the card-issuer, subject to payment of all dues by the cardholder.
The information regarding the closure of card account shall also accordingly be updated with the Credit Information Company/ies within a period of 30 days, the central bank said in its directions.
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