RBI issues guidelines on credit card late payment fees; here's what it says

The Reserve Bank of India has issued a set of Frequently Asked Questions (FAQ) on concerns raised over credit and debit card guidelines. This comes after RBI's circular on ‘amendment to the master director – Credit card and Debit card issued on 6th March.

Late payment fee

In the FAQ, RBI has clarified that for customers who have only made partial payment on the due date, the interest will not be levied on the entire amount but on the outstanding amount which is adjusted for the payments, refunds and reversed transactions as and when credited from the date of transaction. The late payment fee and other charges will also be levied on the outstanding amount after the due payment date and not on the entire amount

Also Read: Credit card rule change: Banks must offer customers a choice of credit card network, says RBI

However, the regulator also mentioned that the customer will lose free credit period.  

RBI FAQs

The Reserve Bank of India has also addressed various other concerns over unsolicited cards, business credit cards, deactivation of cards and procedure to raise complaints on card issuer.

1. On unsolicited cards, the RBI has advised the customers to avoid activation or providing consent for the activation of the cards via OTP. The regulator also reiterated that card issuers are prohibited from issuing unsolicited credit cards and are required to seek prior and explicit consent from the customer before issuing a card. Unsolicitated cards are those that are issued without customer's consent.
2. The Central Bank has asked business card issuers to put in place an effective mechanism to monitor the end use of funds. The new provisions will come into effect immediately.
3. RBI has also clarified that deactivation or blocking of credit cards temporarily curtails  the ability of a cardholder to make any transaction in a credit card account while still maintaining the credit/account relationship with the card-issuer.
4. To raise complaints the RBI advises the customer to first approach the card issuer. If in 30 days an answer is not received or if the customer is not satisfied with the answer, he/she can complain via Online at https://cms.rbi.org.in or a physical complaint written to “Centralised Receipt and Processing Centre, 4th Floor, Reserve Bank of India, Sector -17, Central Vista, Chandigarh - 160017” in the form as specified in Annexure ‘A’ of the Reserve Bank - Integrated Ombudsman Scheme, 2021