On April 21, 2022, the Reserve Bank of India (RBI) published updated regulations for the issue of credit and debit cards. These include updated regulations for credit card cancellation, invoicing, etc.

Every Scheduled Bank (with the exception of Payments Banks, State Co-operative Banks, and District Central Cooperative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India are subject to the credit card-related provisions of the RBI (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022. As of July 1, 2022, these regulations will be in force.

The new guidelines will be in force from July 1st, 2022. Here’s everything that you need to know.

1. Credit Card Billing Cycle

If you produce your credit card statement on the 10th of each month, your billing cycle will begin on the 11th of the previous month and conclude on the 10th of the current month. The term “billing cycle” describes the time period during which a credit card bill is produced.

2. Credit Balance to be Credited to Cardholder’s Account

As per the new regulations, any credit amount that exists in the cardholder’s account shall be transferred to their bank account. Any credit amount left on credit card accounts after they are closed must be transferred to the cardholder’s bank account. If the information is not already available to them, card-issuers must get the cardholder’s bank account information.

3. Billing Cycle Change Option

The ability to alter the billing cycle to a preferred time period will only be available once to cardholders. In order to give customers billing cycle flexibility, this is being done. Card issuers typically do not adhere to a standard billing cycle.

4. Credit Card Issuers Cannot Send Incorrect Bills

Credit card firms are not permitted to send you incorrect bills in addition to these laws. If a cardholder disputes a charge, the card issuer must respond within a maximum of 30 days after the date of the complaint informing the cardholder of the new credit card regulations. This includes explaining the dispute and, if necessary, providing documented proof.

5. Billing Statement Cannot Be Delayed

A client must have at least 14 days to settle their account before interest may be assessed, according to the RBI’s general directive. The responsibility for timely mailing and emailing of card statements and invoices rests with card issuers.

The central bank stated that the card issuer may suggest issuing invoices and account statements via internet/mobile banking after getting the cardholder’s informed authorization in order to prevent recurrent complaints from customers about late invoicing. The implementation of a system where a customer receives the billing statement is anticipated from card issuers.

6. Hefty Penalty despite Request for Credit Card Closure

According to the RBI, customer requests to cancel their credit cards must be honoured by credit card issuers within seven business days. The RBI has specified in its recommendations that following a credit card’s closure, the cardholder must be informed of the closure right away through email, SMS, etc. If card issuers don’t finish the closure procedure within seven working days, the client will be charged Rs. 500 each day of delay up until the account is closed, provided there are no outstanding balances on the account.

7. Complaints from Cardholders must be resolved within 30 days

Card issuers must take care to prevent consumers from receiving inaccurate invoices. The card issuer must respond to a cardholder who complains about a charge within 30 days of the complaint date with an explanation and, if necessary, documentation evidence.

8. No Fees until Dispute Resolution

Any purchases that a cardholder challenges as “fraud” won’t be charged until the problem is properly fixed.

9. Refund Amount to be adjusted against Payment Due

Any credit amount that originates from a failed or reversed transaction, or a refund or similar transactions before the payment due date for which the cardholder has not yet made the payment will be adjusted against the ‘payment due’. The same will be communicated to the cardholder.

10. Cardholder’s Permission Increase in Credit Limit Is Required

To raise the credit limit over a predetermined level, credit card issuers will need the cardholder’s express permission. For credit adjustments that result from reversed/failed transactions, refunds, or similar transactions against the credit limit for which the cardholder has already made a payment, authorization from the cardholder is required if the amount exceeds 1 percent of the credit limit or Rs. 5,000 (whichever is less). Within seven days after the credit transaction, this consent must be requested through email or SMS.

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