New rules for closure of credit cards: If a credit card holder wants to get his card closed and the bank does not take action on it within seven days, then banks will have to pay Rs 500 per day to the credit card holders.
The Reserve Bank of India (RBI) on Thursday came out with its master instruction on issuance and operation of credit cards and debit cards. The Directions called the Reserve Bank of India (Credit Cards and Debit Cards – Issuance and Conduct) Directions, 2022 shall come into force with effect from July 01, 2022 and the provisions of these Directions relating to Credit Cards (Scheduled Banks, State Co-operative Banks and District Central Co-operative Banks) and India Applicable to all Non-Banking Financial Companies (NBFCs) (except payments banks) operating in the As per the instructions, delay in closing the credit card account will result in the card issuer paying a penalty to the cardholder.
RBI rules on closing credit cards
- The RBI directive states that any request for closure of a credit card must be completed by the credit card-issuer within seven working days, subject to payment of all dues by the cardholder.
- The closure of the Credit Card should be immediately communicated to the Cardholder through email, SMS etc.
- The credit card issuer will have to provide multiple channels for submitting the request for closure of the credit card account.
- These include helpline, dedicated e-mail-id, Interactive Voice Response (IVR), prominently visible link on the website, internet banking, mobile-app or any other mode.
- The Card-Issuer will not insist on sending the closure request by post or by any other means which may result in delay in receipt of the request.
- If the card issuer fails to process the credit card closure within seven working days, it should pay a late penalty of Rs 500 per day to the customer till the account is closed, provided there are no outstanding balances in the account.
- If the credit card has not been used for a period exceeding one year, the card issuer may initiate the process of closing the credit card account after informing the cardholder.
- If there is no response from the Cardholder within a period of 30 days, the Card Account will be closed by the Card Issuer, subject to payment of all dues by the Cardholder.
- The card issuer will have to inform the credit information company about the card closure within a period of 30 days.
- After the credit card account is closed, any credit balance available in the credit card account must be transferred to the cardholder’s bank account.
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