The RBI’s new credit cards rules explained 

The RBI issued new directions about credit and debit cards, effective from July 1. We break them down.

Written consent will be required for all applicants for a credit card, according to new guidelines issued by the RBI that will be effective from July 1, 2022.

The guidelines, officially known as the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022, provide a thorough set of instructions primarily to card-issuers about issuing credit and debit cards, co-branded cards, billing, and telemarketing, among other matters.

These directions do not cover every aspect to do with credit and debit cards, and need to be read along with any other RBI directions about specific aspects, such as those covering technology & cyber security of credit and debit cards.

The directions earmark which banks may engage in the credit and debit card business. Most Scheduled Commercial Banks (SCBs) with a net worth of Rs. 100 crores can issue credit cards. The exception is Regional Rural banks (RRBs) which need to collaborate with other banks to do so.

Similarly, Urban Cooperative Banks (UCBs) with a net worth of more than Rs. 100 crores can issue cards subject to certain guidelines. For example, they can only issue credit cards to members. They cannot issue co-branded credit cards, and the total unsecured loans and advances given by a UCB cannot exceed 10 percent of its assets.

NBFCs registered with the Reserve Bank with a minimum net owned fund of Rs 100 crores can issue credit cards, provided they have a Certificate of Registration and permission to enter the business.

All banks can issue debit cards, without needing the approval of the RBI.