New credit card rules set by The Reserve Bank of India
As of October 1, new credit card rules regulations will be in effect. The Reserve Bank of India (RBI) published new lending regulations in April 2022. As of October 1, you’ll notice the three modifications in credit cards listed below. These guidelines relate to the one-time password requests, tokenization of credit card information, and authorization of credit card limits made by card issuers.
The New credit card rules and How will they affect the cardholders?
Approval of credit card limits
Consumers can no longer ask the credit card provider to raise their credit card limit. The cardholder must consent to it and be informed when it is concluded.
When a cardholder’s credit limit was increased, they were only notified. They must specifically concur before the issuer raises the sanctioned and suggested credit limit after October 1st.
Credit Card Tokenization
Previously, funds were sent from banks to the platforms through third-party payment programmes that employed credit and debit card information, cardholder names, and CVVs. By encrypting the credit card data, the RBI has developed a card tokenization mechanism to make such transactions safe and secure.
Issuers are prohibited from capitalising unpaid levies, fees, or taxes in order to levy or compound interest.
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Card companies will check for an OTP (OTP)
If the cardholder hasn’t activated their card for more than 30 days following the date of issuance, the credit card issuer is required to first get one-time-password (OTP) based consent. If the cardholder declines the request to activate the card, the credit card company must deactivate the card without assessing an additional fee within seven business days.
Before activating a credit card that has been inactive for more than 30 days after it was issued, issuers must get a one-time password (OTP)-based permission from the cardholder.
The card issuer must cancel the account without billing the cardholder if they decline within seven business days.
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