New rules for credit card closure | Fusion - WeRIndia

New rules for credit card closure

New rules for credit card closure

The Reserve Bank of India issued new rules on the issuance of credit and debit cards and their operations this week. The new rules will be effective from July 1.

The central bank directed banks and non-banking financial companies (NBFCs) on various things related to cards in these rules. RBI also guided banks and NBFCs on the closure of credit cards.

Here are the new rules issued by RBI on the closure of a credit card:

Credit cardholders can request card issuers like banks and NBFCs to close their credit card accounts. They should clear all dues on the card and make sure that there is no outstanding amount in the credit card account while requesting the closure of the card.

Card issuers should have to honour their request and process the closure of the account within seven working days. Otherwise, they have to pay a penalty of ₹500 per day till the closure of the account for the delay.

Banks, NBFCs, and other card issuers should provide multiple channels like a helpline number, e-mail-id, Interactive Voice Response (IVR), internet banking, mobile app etc., to cardholders to submit their request for closure of a credit card account.

Card issuers should allow cardholders to submit their request for closure through any of these channels but not insist on sending the request through post or any other channel that may result in the delay of receipt of the request.

Cardholders have to be notified through email, SMS etc., about the closure of credit cards immediately after processing the request for closure.

They should use their credit card at least once a year. If the card is not used for more than a year, card issuers can close the credit card account. However, they should inform the cardholder about this.

If the cardholder fails to respond to the intimation of the card issuer on the closure of the card account within 30 days, the card issuer can close the account. They should share and update the information about the closure of the card with the Credit Information Company within 30 days of the closure.

If any credit balance is available in the card account, it should be transferred to the bank account of the cardholders.

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