Credit card issuers must make sure that the cardholder’s approved credit limit is not exceeded at any moment without first getting their express permission.

The Reserve Bank of India (RBI) announced new requirements for issuing credit and debit cards in April 2022. New limitations pertaining to credit card cancellation, billing, etc. are part of these new regulations. The three new credit card regulations are as follows:

1) Card issuers should ask for one-time passwords (OTP) 

If a consumer has not activated a credit card for more than 30 days from the date of issuance, card issuers should request One Time Password (OTP)-based consent from the cardholder before doing so. Card issuers are required to cancel credit card accounts without charging the consumer any fees if consent is not given within seven working days of asking for it.

2) Credit limit authorization 

Additionally, card issuers must make sure that the credit limit that has been approved and notified to the cardholder is never exceeded without the cardholder’s express permission.

3) Interest rate 

Unpaid charges/levies/taxes are not capitalised when charging/compounding interest on credit cards. “The terms and conditions for payment of credit card dues, including the minimum amount due, shall be specified so that no negative amortisation occurs.” The Annex contains an illustration. According to the RBI’s master circular, “unpaid charges/levies/taxes shall not be capitalised for charging/compounding of interest.” 

By September 30, debit and credit cards will be tokenized.

The Reserve Bank of India (RBI) has made it mandatory for all credit and debit card data used in online, point-of-sale, and in-app transactions to be replaced with unique tokens by September 30 this year. This added layer of security by way of tokenisation is expected to enhance users’ digital payment experience.