In April 2022, reserve Bank of India (RBI) issued new norms for credit and Debit Card issue, issue. These new rules include addressing the new restrictions Credit Card Cancellation, Billing, etc. Certain rules of the RBI (Credit Cards and Debit Cards – Issuance and Conduct) Directions, 2022 came into force on July 1, 2022. And a few more will come into force on October 1, 2022.

Here’s a look at three new credit card rules that will come into effect from next month.

Card issuers will ask for One Time Password (OTP)

Credit card issuers must first obtain One Time Password (OTP)-based consent if the cardholder has not activated his card for more than 30 days from the date of issue. If the consumer declines the request to activate the card, the card issuer must cancel the credit card account without charging it within seven working days.

There are many situations where the credit card has been activated and charged without the knowledge of the credit card holders; Upon request for consent, this will not happen and no fee will be charged to the card issuer.

credit limit approval

Card-issuers should ensure that the credit limit sanctioned and notified to the Cardholder is never exceeded without the express permission of the Cardholder.

Individuals only received messages regarding credit limit increase. After October 1, 2022, the card issuer will not increase the credit limit without the cardholder’s written consent.

interest charges

“Terms and conditions for payment of credit card dues, including the minimum amount due, shall be prescribed to ensure that there is no negative amortization. An example is included in the Annexure. RBI’s Master Circular states that Unpaid fees/levies/taxes will not be capitalized for recovery/compounding of interest.

According to the American Express website, “Capitalized interest is the amount on a loan balance (the amount you still have to pay) in addition to the unpaid interest charges.”