New Credit Card Billing Rules Will Be Applicable From 1 July

The Reserve Bank of India (RBI) announced new debit and credit card issuance guidelines on 21 April 2022. These new rules will be related to the closure of credit cards, billing etc. The provisions of credit cards under RBI (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022 will apply to every Scheduled Bank (apart from State Co-operative Banks, District Central Cooperative Banks, and Payments Banks) and all Non-Banking Financial Companies (NBFCs) functioning in India. These rules will be effective from 1 July 2022.

To reduce recurring complaints regarding late billing, a card issuer may recommend sending bills and account statements via internet and mobile banking with a cardholder’s informed consent. The Reserve Bank of India has introduced a new set of guidelines intending to protect the interests of credit cardholders.

Here are the changes you can expect regarding credit card billing:

1. No charges will be levied on a disputed transaction unless and until the dispute is resolved.
2. In a few cases, card issuers do not comply with a typical billing cycle; cardholders will be given a one-time option to modify their credit card’s billing cycle to enable flexibility. This option is available across a few banks already.
3. Refunds for reversed or failed transactions will be adjusted towards the payment due amount from a cardholder.
4. A cardholder will get a reply for his or her complaint raised related to incorrect bills in less than 30 days.
5. Card issuers have to generate bills in time and send them to cardholders without any delay so that the cardholder gets a minimum of 15 days to make the payment.
6. Card issuers will need to seek permission from a cardholder to increase the credit limit beyond a pre-defined limit in case of reversed transactions or refunds. This cut-off has been set as 1% of the original credit limit or Rs 5,000, whichever is lower.

As per RBI Master Direction, the card issuers shall reverse the credit transaction to the cardholder’s bank account if no consent/response is received from the cardholder. Notwithstanding the cut-off, if a cardholder requests the card issuer to reverse the credit amount outstanding in the card account into his/her bank account, the card issuer shall do it within three working days from the receipt of such request.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in