RBI has made some amendments in the rules related to credit cards which will come into effect from March 7. The central bank has also issued FQAs to resolve customer doubts.
In these, RBI has told what are the rules related to credit card overlimit. What should be done if a credit card is issued without application? Let us know about all this in detail.
Credit card often proves to be very helpful in meeting our immediate need of money. This also gives us the skills to improve our financial condition and better money management.
This shows that credit cards have great importance in our everyday life. In such a situation, it is important for us to be aware of the rules related to it. RBI has made some amendments in the rules related to credit cards, which will come into effect from March 7. The central bank has also issued FQAs to resolve customer doubts. Let us know about them.
Can overlimit fees be charged on the card?
To reduce banking frauds, RBI has made it mandatory to first obtain the consent of the cardholder for using credit card overlimit. Meaning that if you have clearly told the bank that you want to use the overlimit of your card, then only this will be allowed.
Additionally, the customer should also be given the option to start or stop mobile banking or on any other platform of the card issuing institution. Without the express consent of the customer, neither overlimit can be given nor any charge can be imposed for it.
What to do if card is issued without consent?
There are clear instructions for card issuing financial institutions to obtain the customer’s consent before issuing it. However, if you have not applied for a credit card and you get it, you should not give consent to activate it through OTP or any other means.
The customer can lodge a complaint with the card issuing institution. If his views are not heard there, he can also go to the RBI Ombudsman.
Card can be issued for other loan accounts also
Many accounts have loan facilities like overdraft, cash loan and working capital loan. There is no restriction on issuing credit cards for them also. But, it has some conditions. Now, as in the overdraft facility, a special type of credit card can be issued to withdraw the amount that can be availed as loan.
All terms and conditions of use of this Credit Card, such as repayment, fines, interest and withdrawal limits, will be as per the terms and conditions applicable to the overdraft facility.
