RBI issued new guidelines for Credit and Debit Cards

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Recently, the RBI has opened a window for non banking finance companies (NBFCs) to issue credit cards and debit cards with the prior approval of the regulator. 

Highlights of the Guidelines

  • Conduct of Credit Card Business
    1. Scheduled Commercial Banks (SCBs) (except RRBs) with net worth of ₹100 crore. 
    2. RRBs are permitted to issue credit cards in collaboration with their sponsor bank or other banks. 
    3. Urban Cooperative Banks (UCBs) with minimum net worth of ₹100 crore. 
    4. Non-Banking Financial Companies registered with the Reserve Bank can undertake credit card business only with prior approval of the Reserve Bank.
  • Conduct of Debit Card Business
    1. Almost all the banks issue debit cards. 
    2. Prior approval of the Reserve Bank is not necessary for banks desirous of issuing debit cards to their customers.
  • Failure on the part of the card-issuers to complete the process of closure within seven working days shall result in a penalty of ₹500 per day of delay payable to the customer, until the closure of the account provided there is no outstanding balance in the account. 
  • If a credit card has not been used for a period of more than one year, the process to close the card shall be initiated after intimating the cardholder. 
  • If no reply is received from the cardholder within a period of 30 days, the card account shall be closed by the card-issuer.

Difference between Credit and Debit Cards



Q. Consider the following statement with respect to Credit and Debit card business in India : 
1. Scheduled Banks with a net worth of Rs. 100 crore and above can issue credit card and debit cards. 
2. Non-banking finance companies (NBFCs) can't issue debit cards but are allowed to issue credit cards with a minimum net owned fund of Rs. 100 crore. 
3. Urban cooperative banks (UCBs) are not allowed to be part of the debit and credit card business. Which of the statement(s) given above is/are correct? 
(a) Only 1 and 2 (b) Only 1 (c) Only 1 and 3 (d) 1, 2 and 3
Ans. (b)

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