Mumbai: 3 new rules introduced by the Reserve Bank of India for credit cards will come into effect from October 1. Let’s find out what it is. These rules were published last April.
The three new rules are credit card limit approval, credit card tokenization and card issuer asking users for OTP number to activate the card.
With this, companies issuing credit cards to users cannot increase the credit limit of the card without informing the users. It requires user consent. Similarly, the details of the transferred amount should also be communicated to the user once the task is completed. Prior to this, users’ permission is not required to increase the credit limit.
RBI introduces tokenization system to secure card transactions. So it is no longer allowed to store user name and card details. Hence, token is necessary for transactions. This applies to both credit and debit cards.
Similarly, if the user does not activate the credit card within 30 days of issue, card issuers must obtain OTP from the user to activate it. However, if the user refuses to activate the card within 7 working days, it should be deactivated. No extra charges should be charged for it.