RBI issues guidelines for NBFCs
Banks and non-banking financial companies (NBFCs) shall not issue credit cards to their customers as per their wish from now on. They have to issue these cards adhering to the new guidelines of the Reserve Bank of India (RBI).
The RBI issued directions about debit and credit cards to all banks and NBFCs. These guidelines will be effective from July 1.
RBI, in its guidelines, stated that NBFCs can’t undertake credit card business without taking prior approval from the central bank. They shall not issue debit cards or credit cards or similar products physically or virtually without prior approval from the RBI.
In addition to that, they need to obtain a certificate of registration to engage in this activity. The company that wants to engage must own a fund of ₹100 crores.
The guidelines will benefit major NBFCs as they can directly issue credit cards with the prior approval of RBI. Currently, some of them are issuing credit cards in association with scheduled banks.
The scheduled commercial banks with a net worth of ₹100 crores or more can engage in the credit card business. They can conduct their business independently or jointly with other NBFCs or other card-issuing banks. Except for small finance banks and regional rural banks, all scheduled commercial banks that want to set up separate holdings for credit card business require the approval of RBI.
Coming to regional rural banks, they can issue credit cards along with their sponsor bank or other banks.
Banks do not require a prior nod from the RBI to issue debit cards to their customers. They should issue debit cards only to customers of savings bank accounts and current accounts but not to cash credit or loan account holders.
Besides, banks should not force their customers to avail of debit card facilities. They also should not link it with any other facility offered by them.
Also, RBI issued guidelines on the interest rate of credit cards. The central bank says that the interest charged by the banks on credit cards should be justifiable. Banks should inform interest rates and the methodology of calculation of charges to their customers upfront while issuing the card.
Image from Maxpixel (Free for commercial use / CC0 Public Domain)
You may also like
Image Reference: https://www.maxpixel.net/Credit-Cards-Money-Credit-Card-Cards-5141613
Recent Posts
- FASTag to stay as a satellite system, still under reviewCurrently, FASTag remains the primary method of toll collection in India.
- India’s youth urged to lead amid global shiftsDespite its economic strength, India faces the major challenge of creating 8 to 10 million jobs each year.
- Tripura to launch seaplane services to boost tourismIn an effort to strengthen connectivity and attract more visitors, the Tripura government is set to introduce seaplane services in the state. This initiative aims to promote tourism by offering a unique travel experience to scenic destinations across the region.
- FASTag to stay as a satellite system, still under review
What’s new at WeRIndia.com
News from 700+ sources
-
Lady Gaga Handles Mic Glitch At Coachella Like A Pro: At Least, You Know I Sing Live
-
Bhagyashri Borse Breaks Silence On Dating Rumours With Ram Pothineni
-
Bajrang Dal, VHP disrupt Easter celebrations with sticks in Gujarat
-
Social boycott of Dalits by Kapu community at Mallam village in Kakinada district withdrawn after peace committees intervention
-
Erode Corporation ensuresuninterrupted drinking water supply
-
These lesser-known saving hacks actually work wonders
-
WeRIndia – A News Aggregator
Visit werindia.com for all types of National | Business | World | Politics | Entertainment | Health related news and much more..
Leave a Reply