Here’s everything you need to know about Credit Card billing, effective from July 1st, 2022, as defined by the RBI’s guidelines around Credit and Debit Card issuance released in April.
On April 21st, 2022, India’s central bank, the Reserve Bank of India, released a new set of guidelines pertaining to the issuance of both Credit Cards and Debit Cards in India. These guidelines include new rules around Credit Card closure, billing cycles and so forth.
The provisions defined in the new set of guidelines are applicable to every Scheduled Bank (but not Payments Banks, State Co-operative Banks and District Central Cooperative Banks) and all NBFCs (Non-Banking Financial Companies) that operate in India.
The new guidelines will be in force from July 1st, 2022. Here’s everything that you need to know.
1. Credit Card Billing Cycle
If your Credit Card statement is generated on the 10th of every month, then your billing cycle will start on the 11th of the previous month and end on the 10th of the current month. Billing cycle refers to the time frame within which a Credit Card bill is generated.
2. Billing Statement Cannot Be Delayed
In its master direction, the RBI has said that a consumer must have enough time, at least 14 days, to pay their bill before interest can be charged. Card issuers will need to ensure that card bills/statements are sent to the consumer and emailed in a timely manner.
The central bank said that in order to avoid repeated complaints from consumers about late invoicing, the card issuer may propose issuing bills and account statements via internet/mobile banking after taking the cardholder’s informed authorisation. Card issuers are expected to implement a system wherein a consumer receives the billing statement.
3. Cardholder Complaints to be Addressed Within 30 Days
Card issuers will need to ensure that no incorrect bills are generated and given to consumers. If a cardholder raises an issue about a bill, then the card issuer would need to offer an explanation, along with documentary evidence if relevant, to the cardholder within 30 days of the complaint date.
Additional Reading: Your Credit Card Billing Cycle in a Nutshell
4. No Charges Until Dispute Resolution
Any transactions that a cardholder disputes as “fraud” will not be charged until the issue is satisfactorily resolved.
5. Billing Cycle Change Option
Cardholders will be given a one-time option to change their billing cycle to a time frame of their preference. This is being done to offer consumers flexibility of billing cycles. Generally, card issuers do not follow a typical billing cycle.
6. Refund Amount to be Adjusted Against Payment Due
Any credit amount that originates from a failed or reversed transaction, or a refund or similar transactions before the payment due date for which the cardholder has not yet made the payment will be adjusted against the ‘payment due’. The same will be communicated to the cardholder.
7. Cardholder Approval Must for Credit Limit Increase
Credit Card issuers will have to take the explicit consent of a cardholder in order to increase the credit limit beyond a set limit. A cardholder’s approval will be needed to adjust credit amounts above a cut-off of 1% of the credit limit or Rs. 5,000 (whichever is less), which arises from reversed/failed transactions, refunds or similar transactions against the credit limit for which the cardholder has already made a payment. This permission must be sought via email or SMS within seven days of the credit transaction.
The central bank’s Master Direction states that if no consent/response is received from the cardholder, the card issuer shall reverse the credit transaction to the cardholder’s bank account. If a cardholder makes a request to the card issuer for reversal of the credit amount outstanding in the card account into their bank account, the card issuer would need to do it within three working days from the date of receipt of this request.
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