Reserve Bank of India announces stricter norms for Credit Card Operations of Banks: Banknet India

Newsletter

Daily Rates

Daily News

Book Store

Home

Conferences

Technology

Finance

RBI CREDIT AND MONETARY POLICIES (1999-2008) click here

RBI announces stricter norms for Credit Card Operations of Banks in India

Reserve Bank of India had undertaken a study on the credit card operations of banks, based on the complaints received by the Bank as also by the Offices of the Banking Ombudsmen. RBI in a notification dated July 23,2008 has asked banks to scrupulously adhere to following instructions and any violation/s would be viewed seriously.

Issue of Unsolicited Cards

Banks have been advised that unsolicited credit cards should not be issued and that in case an unsolicited card is issued and activated without the consent of the recipient and the latter is billed for the same, the card issuing bank shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed.

In addition, the person in whose name the card is issued can also approach the Banking Ombudsman who would determine the amount of compensation payable by the bank to the recipient of the unsolicited credit card as per the provisions of the Banking Ombudsman Scheme, 2006 i.e for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him. Further, there have been instances where unsolicited credit cards issued have been misused before reaching the person in whose name the card is issued. It is clarified that any loss arising out of misuse of such unsolicited cards will be the responsibility of the card issuing bank only and the person in whose name the card has been issued cannot be held responsible.

Insurance cover to credit card holders

RBI has decided that in cases where the banks are offering any insurance cover to their credit card holders, in tie-up with insurance companies, the banks may consider obtaining in writing from the credit card holder the details of nominee/s for the insurance cover in respect of accidental death and disablement benefits. Banks may ensure that the relevant nomination details are recorded by the Insurance Company. Banks may also consider issuing a letter to the credit card holder indicating the details regarding the name, address and telephone number of the Insurance Company which will handle the claims relating to the insurance cover.

RBI Guidelines for Credit Card Operations
NBFCs to issue Co-branded Credit Cards
RBI approval for Co-branded Domestic Credit Cards
Helpline for Credit Card Customers- A Special Feature

FOR MORE RBI GUIDELINES ...Click Here