The Reserve Bank on Thursday requested card firms to not situation unsolicited bank cards or improve an present card with out the specific consent of the shopper, failing which they must pay double the billed quantity as penalty.
It additionally requested card issuers and third-party brokers to not resort to intimidation or harassment throughout restoration of dues from prospects.
In its grasp instructions on bank card and debit card issuance, the RBI mentioned “the issue of unsolicited cards/upgradation is strictly prohibited”.
These instructions can be efficient from July 1, 2022.
It additional mentioned in case an unsolicited card is issued or an present card upgraded and activated with out the specific consent of the recipient, the cardboard issuer must reverse the fees and pay a penalty double the billed quantity.
According to the grasp instructions, industrial banks with internet price of over Rs 100 crore can undertake bank card enterprise both independently or in tie-up association with different card issuing banks/NBFCs.
Regional rural banks (RRBs) are additionally permitted to situation bank cards in collaboration with their sponsor financial institution or different banks.
“In addition, the person in whose name the card is issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card as per the provisions of the Ombudsman Scheme, for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him/her,” the central financial institution mentioned.
The RBI additional mentioned non-banking monetary firms (NBFCs) shall not undertake bank card enterprise with out its prior approval.
“Without obtaining prior approval from the Reserve Bank, NBFCs shall not issue debit cards, credit cards, charge cards, or similar products virtually or physically.” With regard to restoration of dues from prospects, the RBI has requested the issuers to make sure that they and their brokers adhere to the honest practices code for lenders.
In explicit, with regard to appointment of third-party companies for debt assortment, the card-issuers shall be sure that their brokers chorus from actions that might injury their integrity and repute and observe strict buyer confidentiality, it added.
“Card-issuers/their agents shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the credit cardholders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations,” it mentioned.
With regard to issuance of debit playing cards, RBI mentioned banks mustn’t drive a buyer to avail debit card facility and mustn’t hyperlink issuance of debit card to availment of another service from the financial institution.
Further, the apex financial institution mentioned a co-branded credit score/debit card shall explicitly point out that it has been issued beneath a co-branding association.
“The co-branding partner shall not advertise/market the co-branded card as its own product. In all marketing/advertising material, the name of the card-issuer shall be clearly shown,” it mentioned.
NBFCs desirous of getting into right into a co-branding association for situation of bank cards can even come beneath the rules.
Among others, the RBI requested card issuers to place in place a grievance redressal mechanism and publicise it broadly.
Card issuers shall be sure that their name centre workers are skilled adequately to competently deal with and escalate a grievance, if obligatory, it added.
Further, it mentioned card issuers can be liable to compensate the complainant for the lack of his/her time, bills, monetary loss in addition to for the harassment and psychological anguish suffered for the fault of the cardboard issuer and the place the grievance has not been redressed in time.
“If a complainant does not get satisfactory response from the card-issuer within a maximum period of one month from the date of lodging the complaint, he/she will have the option to approach the Office of the concerned RBI Ombudsman for redressal of grievances,” it added.
Source: www.financialexpress.com”