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3 new credit card rules from October 1: All you need to know


In April 2022, the Reserve Bank of India (RBI) issued new criteria for credit and debit card issuance. These new rules include new restrictions addressing credit card cancellation, billing, etc. Here are the three new rules of credit card:

1) Card-issuers to seek One Time Password (OTP)

Card issuers should seek One Time Password (OTP) based consent from the cardholder for activating a credit card if the same has not been activated by the customer for more than 30 days from the date of issuance. In case of no consent, card issuers will have to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation from the customer.

2) Credit limit approval

Further, card issuers have to ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder.

3) Rate of interest

No capitalization of unpaid charges/levies/taxes for charging/compounding of interest on credit cards. “The terms and conditions for payment of credit card dues, including the minimum amount due, shall be stipulated so as to ensure there is no negative amortization. An illustration is included in the Annex. The unpaid charges/levies/taxes shall not be capitalized for charging/compounding of interest,” stated RBI’s master circular.

Tokenisation of debit, credit cards by September 30

The Reserve Bank of India (RBI) has made it mandatory for all credit and debit card data used in online, point-of-sale, and in-app transactions to be replaced with unique tokens by September 30 this year. This added layer of security by way of tokenisation is expected to enhance users’ digital payment experience.

The deadline was extended by three months starting July. Large merchants for the most part have already complied with the RBI’s CoF tokenization requirements.


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