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
- Kodo Millet: A superfood for health, digestion, and wellnessWith its impressive nutrient profile and easy adaptability, Kodo millet is more than a grain; it’s a wellness staple.
- Insurance just got cheaper: GST exempted from September 22Multi-year or mid-term plans may need specific clarification from your insurer or CBIC notifications.
- Exciting career opportunities at IMScIMSc Recruitment 2025 is offering 03 contract-based vacancies for the posts of Project Associate I and Library Trainees.
- Kodo Millet: A superfood for health, digestion, and wellness
What’s new at WeRIndia.com
News from 700+ sources
-
It Seems That The Selectors Have Decided To Look Past Karun Nair, Says Aakash Chopra
-
Mumbai: One Dead, Five Injured Due To Electrocution During Ganesh Immersion Procession
-
Oyo’s Parent Entity Changes Corporate Name To Prism
-
Oyo rebrands corporate name to PRISM to reflect global expansion
-
HAL Working With Indian Army To Fix Issues In Dhruv Helicopters
-
CBIC will take up industry bodies’ complaints of non-reduction in prices, says chairman
-
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