2. Interest rates and other charges
a. Card issuers should ensure that there is no delay in
dispatching bills and the customer has sufficient number of days (at least one
fortnight) for making payment before the interest starts getting charged.
b. Card issuers should quote annualized percentage rates
(APR) on card products (separately for retail purchase and for cash advance,
if different). The method of calculation of APR should be given with a couple
of examples for better comprehension. The APR charged and the annual fee should
be shown with equal prominence. The late payment charges, including the method
of calculation of such charges and the number of days, should be prominently
indicated. The manner in which the outstanding unpaid amount will be included
for calculation of interest should also be specifically shown with prominence
in all monthly statements. Even where the minimum amount indicated to keep the
card valid has been paid, it should be indicated in bold letters that the interest
will be charged on the amount due after the due date of payment. These aspects
may be shown in the Welcome Kit in addition to being shown in the monthly statement.
c. The bank / NBFC should not levy any charge that was
not explicitly indicated to the credit card holder at the time of issue of the
card and getting his / her consent. However, this would not be applicable to
charges like service taxes, etc. which may subsequently be levied by the Government
or any other statutory authority.
d. The terms and conditions for payment of credit card
dues, including the minimum payment due, should be stipulated so as to ensure
that there is no negative amortization.
e. Changes in charges (other than interest) may be made
only with prospective effect giving notice of at least one month. If a credit
card holder desires to surrender his credit card on account of any change in
credit card charges to his disadvantage, he may be permitted to do so without
the bank levying any extra charge for such closure.
3. Wrongful billing
a. The card issuing bank / NBFC should ensure that wrong
bills are not raised and issued to customers. In case, a customer protests any
bill, the bank / NBFC should provide explanation and, if necessary, documentary
evidence to the customer within a maximum period of sixty days with a spirit
to amicably redress the grievances.
b. To obviate frequent complaints of delayed billing, the
credit card issuing bank / NBFC may consider providing bills and statements
of accounts online, with suitable security built therefor.
4. Use of DSAs / DMAs and other agents
a. When banks / NBFCs outsource the various credit card
operations, they have to be extremely careful that the appointment of such service
providers do not compromise with the quality of the customer service and the
bank / NBFC’s ability to manage credit, liquidity and operational risks. In
the choice of the service provider, the bank / NBFCs have to be guided by the
need to ensure confidentiality of the customer’s records, respect customer privacy,
and adhere to fair practices in debt collection.
b. The Code of Conduct for Direct Sales Agents (DSAs) formulated
by the Indian Banks’ Association (IBA) could be used by banks / NBFCs in formulating
their own codes for the purpose. The bank / NBFC should ensure that the DSAs
engaged by them for marketing their credit card products scrupulously adhere
to the bank / NBFC’s own Code of Conduct for credit card operations which should
be displayed on the bank / NBFC’s website and be available easily to any credit
c. The bank / NBFC should have a system of random checks
and mystery shopping to ensure that their agents have been properly briefed
and trained in order to handle with care and caution their responsibilities,
particularly in the aspects included in these guidelines like soliciting customers,
hours for calling, privacy of customer information, conveying the correct terms
and conditions of the product on offer, etc.
5. Protection of Customer Rights
Customer’s rights in relation to credit card operations primarily
relate to personal privacy, clarity relating to rights and obligations, preservation
of customer records, maintaining confidentiality of customer information and
fair practices in debt collection. The card issuing bank / NBFC would be responsible
as the principal for all acts of omission or commission of their agents (DSAs
/ DMAs and recovery agents).
i. Right to privacy
a. Unsolicited cards should not be issued. In case, an
unsolicited card is issued and activated without the consent of the recipient
and the latter is billed for the same, the card issuing bank / NBFC shall not
only reverse the charges forthwith, but also pay a penalty without demur to
the recipient amounting to twice the value of the charges reversed.
b. Unsolicited loans or other credit facilities should
not be offered to the credit card customers. In case, an unsolicited credit
facility is extended without the consent of the recipient and the latter objects
to the same, the credit sanctioning bank / NBFC shall not only withdraw the
credit limit, but also be liable to pay such penalty as may be considered appropriate.
c. The card issuing bank / NBFC should not unilaterally
upgrade credit cards and enhance credit limits. Prior consent of the borrower
should invariably be taken whenever there are any change/s in terms and conditions.
d. The card issuing bank / NBFC should maintain a Do Not
Call Registry (DNCR) containing the phone numbers (both cell phones and land
phones) of customers as well as non-customers (non-constituents) who have informed
the bank / NBFC that they do not wish to receive unsolicited calls / SMS for
marketing of its credit card products. The DNCR should be set up within two
(2) months from the date of this circular and wide publicity should be given
to the arrangement.
e. The intimation for including an individual’s telephone
number in the Do Not Call Registry (DNCR) should be facilitated through a website
maintained by the bank / NBFC or on the basis of a letter received from such
a person addressed to the bank / NBFC.
f. The card issuing bank / NBFC should introduce a system
whereby the DSAs/ DMAs as well as its Call Centers have to first submit to the
bank / NBFC a list of numbers they intend to call for marketing purposes. The
bank / NBFC should then refer to the Do Not Call Registry (DNCR) and only those
numbers which do not figure in the Registry should be cleared for calling.
g. The numbers cleared by the card issuing bank / NBFC
for calling should only be accessed. The bank / NBFC would be held responsible
if a Do Not Call Number (DNCN) is called on by its DSAs / DMAs or Call Centre/s.
h. The card issuing bank / NBFC should ensure that the
Do Not Call Registry (DNCR) numbers are not passed on to any unauthorised person/s
or misused in any manner.
i. Banks / NBFCs/ their agents should not resort to invasion
of privacy viz., persistently bothering the card holders at odd hours, violation
of 'do not call' code etc.
(ii) Customer confidentiality
a. The card issuing bank / NBFC should not reveal any information
relating to customers obtained at the time of opening the account or issuing
the credit card to any other person or organization without obtaining their
specific consent, as regards the purpose/s for which the information will be
used and the organizations with whom the information will be shared. Banks /
NBFCs should satisfy themselves, based on specific legal advice, that the information
being sought from them is not of such nature as will violate the provisions
of the laws relating to secrecy in the transactions. Banks / NBFCs would be
solely responsible for the correctness or otherwise of the data provided for
b. In case of providing information relating to credit
history / repayment record of the card holder to a credit information company
(specifically authorized by RBI), the bank / NBFC may explicitly bring to the
notice of the customer that such information is being provided in terms of the
Credit Information Companies (Regulation) Act, 2005.
c. Before reporting default status of a credit
card holder to the Credit Information Bureau of India Ltd. (CIBIL) or any other
credit information Company authorized by RBI, banks / NBFCs may ensure that
they adhere to a procedure, duly approved by their Board, including issuing
of sufficient notice to such card holder about the intention to report him/
her as defaulter to the Credit Information Company. The procedure should also
cover the notice period for such reporting as also the period within which such
report will be withdrawn in the event the customer settles his dues after having
been reported as defaulter. Banks / NBFCs should be particularly careful in
the case of cards where there are pending disputes. The disclosure/ release
of information, particularly about the default, should be made only after
the dispute is settled as far as possible. In all cases, a well laid down procedure
should be transparently followed. These procedures should also be transparently
made known as part of MITCs.
d. The disclosure to the DSAs / recovery agents should
also be limited to the extent that will enable them to discharge their duties.
Personal information provided by the card holder but not required for recovery
purposes should not be released by the card issuing bank / NBFC. The card issuing
bank / NBFC should ensure that the DSAs / DMAs do not transfer or misuse any
customer information during marketing of credit card products.
(iii) Fair Practices in debt collection
(a) In the matter of recovery of dues, banks / NBFCs may
ensure that they, as also their agents, adhere to the extant instructions on
Fair Practice Code for lenders (circular DBOD. Leg. No. BC. 104 /09.07.007 /
2002–03 dated May 5, 2003) as also IBA’s Code for Collection of dues and repossession
of security. In case banks / NBFCs have their own code for collection of dues
it should, at the minimum, incorporate all the terms of IBA's Code.
(b) In particular, in regard to appointment of third party
agencies for debt collection, it is essential that such agents refrain from
action that could damage the integrity and reputation of the bank / NBFC and
that they observe strict customer confidentiality. All letters issued by recovery
agents must contain the name and address of a responsible senior officer of
the card issuing bank whom the customer can contact at his location.
(c) Banks / NBFCs / their agents should 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 the privacy of the credit card holders’ family members, referees
and friends, making threatening and anonymous calls or making false and misleading
6. Redressal of Grievances
a. Generally, a time limit of sixty (60) days may be given
to the customers for preferring their complaints / grievances.
b. The card issuing bank / NBFC should constitute Grievance
Redressal machinery within the bank / NBFC and give wide publicity about it
through electronic and print media. The name and contact number of designated
grievance redressal officer of the bank / NBFC should be mentioned on the credit
card bills. The designated officer should ensure that genuine grievances of
credit card subscribers are redressed promptly without involving delay.
c. The grievance redressal procedure of the bank / NBFC
and the time frame fixed for responding to the complaints should be placed on
the bank / NBFC's website. The name, designation, address and contact number
of important executives as well as the Grievance Redressal Officer of the bank
/ NBFC may be displayed on the website. There should be a system of acknowledging
customers' complaints for follow up, such as complaint number / docket number,
even if the complaints are received on phone.
d. If a complainant does not get satisfactory response
from the bank / NBFC within a maximum period of thirty (30) days from the date
of his lodging the complaint, he will have the option to approach the Office
of the concerned Banking Ombudsman for redressal of his grievance/s. The bank
/ NBFC shall be liable to compensate the complainant for the loss of his time,
expenses, financial loss as well as for the harassment and mental anguish suffered
by him for the fault of the bank and where the grievance has not been redressed
7. Internal control and monitoring systems
With a view to ensuring that the quality of customer service
is ensured on an on-going basis in banks / NBFCs, the Standing Committee on
Customer Service in each bank / NBFC may review on a monthly basis the credit
card operations including reports of defaulters to the CIBIL, credit card related
complaints and take measures to improve the services and ensure the orderly
growth in the credit card operations. Banks / NBFCs should put up detailed quarterly
analysis of credit card related complaints to their Top Management. Card issuing
banks should have in place a suitable monitoring mechanism to randomly check
the genuineness of merchant transactions.
8. Right to impose penalty
The Reserve Bank of India reserves the right to impose any
penalty on a bank / NBFC under the provisions of the Banking Regulation Act,
1949 for violation of any of these guidelines.
(P. Vijaya Bhaskar)
Chief General Manager
1. Most Important Terms and Conditions (MITCs)
(a) Fees and Charges
- Joining fees for primary card holder and for add-on card holder
- Annual membership fees for primary and add-on card holder
- Cash advance fee
- Service charges levied for certain transactions
- Interest free (grace) period – illustrated with examples
- Finance charges for both revolving credit and cash advances
- Overdue interest charges—to be given on monthly and annualised basis
- Charges in case of default
(b) Drawal limits
- Credit limit
- Available credit limit
- Cash withdrawal limit
- Billing statements—periodicity and mode of sending
- Minimum amount payable
- Method of payment
- Billing disputes resolution
- Contact particulars of 24 hour call centres of card issuer
- Grievances redressal escalation—contact particulars of officers to be
- Complete postal address of card issuing bank
- Toll free number for customer care services
(d) Default and circumstances
- Procedure including notice period for reporting a card holder as defaulter
- Procedure for withdrawal of default report and the period within which
would be withdrawn after settlement of dues
- Recovery procedure in case of default
- Recovery of dues in case of death / permanent incapacitance of cardholder
- Available insurance cover for card holder and date of activation of policy
(e) Termination / revocation of card membership
i) Procedure for surrender of card by card holder - due notice
(f) Loss/theft/misuse of card
- Procedure to be followed in case of loss/ theft/ misuse of card-mode of
intimation to card issuer
- Liability of card holder in case of (i) above
- Type of information relating to card holder to be disclosed with and without
approval of card holder
2. Disclosure of MITCs - Items to be disclosed in stages
- During marketing - Item no: a
- At application - Item nos:all items from a to g
- Welcome Kit - Item nos: all items from a to g
- On billing - Item nos: a, b and c,
- On an ongoing basis, any change of the terms and conditions
- The font size of MITC should be minimum Arial-12
- The normal terms and conditions communicated by the card issuer to
the card holder at different stages will continue as hitherto.