Adhering to representations by stakeholders, the Reserve Bank of India (RBI) has given a three-month extension for select provisions related to activating credit cards and their limits.
These provisions will now come into effect from October 1, 2022 onwards. They were earlier scheduled to be implemented with effect from July 1, 2022.
The extension has been given for the provision that mandated card-issuing banks or institutions to seek One Time Password (OTP) based consent from the cardholder for activating a credit card if it has not been activated by the customer themselves for more than 30 days from the date of issuance.
If no consent is received for activating the card, card-issuers shall close the credit card account without any cost to the customer within seven working days from date of seeking confirmation from the customer, the provision further said.
The Indian Banks' Association (IBA) had earlier sought a six-month extension on the changes in the Master Directions for cards, however the RBI said in a notification issued today that considering the requests from the association, the provisions' implementation has been extended by three months.
Another provision which has received extension, says that card-issuers shall ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder.
Also there will be no capitalisation of unpaid charges, levies or taxes for charging or compounding of interest, the provision said further.
However no extension has been provided to provisions related to co-branding, which limit the role of co-branding entities to marketing and distribution of credit or pre-paid cards.
This provision, which will come into effect from July 1, 2022, says that the co-branding partner shall not have access to information relating to transactions undertaken through the card.