Credit Card usage is going up steadily in the country and a lot of banks have come forward to offer discounts and special offers to the consumers. Meanwhile, we have come to know that new rules are going to be implemented from October 1st, 2022 on credit cards. Already, the Reserve Bank of India introduced new rules from July 1st, 2022. Now, the RBI also brought three new rules from October 1st, 2022.
The first and foremost rule is that the card-issuers will be seeking one time password. Credit card issuers must first obtain One Time Password (OTP)-based consent if a cardholder hasn’t activated their card for more than 30 days from the date of issuance. RBI also guided the card-issuers that if the customer declines the request to activate the card, the card issuer must cancel the credit card account without charging them within seven working days.
The second rule is the approval of credit limit. The card-issuers must make sure that the credit limit has been approved and notified to the card holder. It should never exceed without the permission of card holder.
At the same time, there will be a new in terms of the interest charges. In this regard, the RBI’s master circular stated, “The terms and conditions for payment of credit card dues, including the minimum amount due, shall be stipulated so as to ensure there is no negative amortization. An illustration is included in the Annex. The unpaid charges/levies/taxes shall not be capitalized for charging/compounding of interest.”
