Following statements from stakeholders, the Reserve Bank of India (RBI) has granted a three-month reprieve on certain provisions related to credit card activation and their limits.
These provisions will now come into effect from October 1, 2022. They were previously planned to be implemented by July 1, 2022.
The extension was given for the stipulation that card-issuing banks or institutions are required to request permission from the cardholder based on a one-time password (OTP) to activate a credit card if it has not been activated by the customer for more than 30 days from the date of issue.
If authorization is not obtained to activate the card, card issuers will close the credit card account at no cost to the customer within seven business days from the date the customer requested confirmation, the provision said.
The Indian Banks’ Association (IBA) had previously requested a six-month extension for the changes to the Master Directions for cards, but the RBI said in a statement released today that given the association’s requests, the implementation of the provisions has been extended by three months.
Another provision that has been granted an extension states that card issuers must ensure that the credit limit as sanctioned and advised to the cardholder is not exceeded at any time without obtaining the express consent of the cardholder.
Also, there will be no capitalization of unpaid charges, levies or taxes for charging or compounding interest, the provision said.
However, no extension is envisaged for co-branding provisions that limit the role of co-branding entities to marketing and distributing credit or prepaid cards.
This provision, which comes into effect on July 1, 2022, says that the co-branding partner will not have access to information related to transactions made through the card.