RBI/2022-23/92 

DoR.AUT.REC.No.27/24.01.041/2022-23 April 21, 2022 

Master Direction – Credit Card and Debit Card – Issuance and  

Conduct Directions, 2022 

In exercise of the powers conferred by Sections 35A and Section 56 of the Banking  Regulation Act, 1949 and Chapter IIIB of the Reserve Bank of India Act, 1934, the Reserve  Bank of India being satisfied that it is necessary and expedient in the public interest so to do,  hereby, issues the Directions hereinafter specified. 

CHAPTER – I 

PRELIMINARY 

1. Short Title and Commencement 

(a) These Directions shall be called the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022. 

(b) These Directions shall be effective from July 01, 2022. 

2. Applicability 

(a) The provisions of these Directions relating to credit cards shall apply to every Scheduled  Bank (excluding Payments Banks, State Co-operative Banks and District Central Co operative Banks) and all Non-Banking Financial Companies (NBFCs) operating in India. 

(b) The provisions of these Directions relating to debit cards shall apply to every bank  operating in India. 

(c) These directions cover the general and conduct regulations relating to credit, debit and  co-branded cards which shall be read along with prudential, payment and technology &  cyber security related directions applicable to credit, debit and co-branded cards, as  issued by the Reserve Bank.

Master Directions – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 

3. Definitions 

(a) In these Directions, unless the context otherwise requires, the terms herein shall bear the  meanings assigned to them below — 

i. Add-on Credit Card means a supplementary credit card to the principal or primary credit card, issued to person/s with predefined relationship with the primary  cardholder, within the credit limits and liability of the latter, subject to such terms and  conditions as stipulated by the card-issuer. 

ii. Annual Percentage Rate is the annual cost of credit to the cardholder which includes  interest rate and all other charges associated with the credit card under different  scenarios based on card features. 

iii. Billing Cycle/Billing Period is the regular length of time between closing dates of two  consecutive bills raised by the card-issuer. 

iv. Business Credit Cards are issued to business entities/individuals for the purpose of  business expenses with specified terms and conditions and not for personal use. v. Cardholders – A person to whom a card is issued or one who is authorized to use an  issued card. 

v. Card-issuers – Banks which issue debit or credit cards and NBFCs which have been  permitted by RBI to issue credit cards in India. 

vii. Card Loyalty/Reward Programme/s are those schemes linked to a credit card or  debit card whereby the card-issuer or associated merchant establishments, upon use  of the card/s, offer digital coupons, points, discounts, cash backs or other benefits having monetary value that can be used/redeemed for the same transactions or other  future transactions after accumulation.  

viii. Charge Card is a type of credit card where the user has to pay the billed amount in  full on due date after the billing cycle, and no rolling over of credit to the next billing  cycle is permitted. 

ix. Co-branded Card is a card that is issued jointly by a card-issuer and a co-branding entity bearing the names of both the partnering entities. 

x. Convenience Fee is a fixed or pro-rata charge on use of credit/debit cards as one of  the alternative forms of payment which is not ordinarily accepted vis-à-vis other forms  of payment. 

xi. Corporate Credit Card is a credit card that is issued to specific employee/s of a  corporate employer wherein the liability could rest with the corporate entity or the  employee or jointly on both, as per the product design features. 

Master Directions – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 

xii. Credit Card is a physical or virtual payment instrument containing a means of  identification, issued with a pre-approved revolving credit limit, that can be used to  purchase goods and services or draw cash advances, subject to prescribed terms and  conditions. 

xiii. Credit Limit is the maximum amount of revolving credit determined and notified to the  cardholder to transact in the credit card account. 

xiv. Debit Card is a physical or virtual payment instrument containing a means of  identification, linked to a Saving Bank/Current Account which can be used to withdraw  cash, make online payments, do PoS terminal/Quick Response (QR) code  transactions, fund transfer, etc. subject to prescribed terms and conditions. 

xv. Form Factor is the physical or virtual instrument that can be used in place of a card  to undertake a payment/banking transaction. 

xvi. Interest-Free Credit Period is the time period from the date of transaction to the due  date of payment, wherein interest free payment can be made, subject to the payment  of entire outstanding on or before the payment due date by the cardholder. 

xvii. Minimum Amount Due is the minimum amount of money, as a part of the total bill  amount, that a cardholder has to pay to not be treated as an overdue bill. xviii. Most Important Terms and Conditions (MITC) are the standard set of conditions for  the issuance and usage of credit cards, thereby defining the responsibilities and  liabilities of the card-issuer and the cardholder.  

xix. Prepaid Card is a Prepaid Payment Instrument as defined in the Master Direction on  Prepaid Payment Instruments. 

xx. Principal Cardholder means the customer who has been issued credit card by a  card-issuer and on whose name the card account has been opened.  

xxi. Unsolicited Credit Card is a credit card issued without a specific written/digital request or an application therefor.  

Provided the issuance of a credit card for renewal or replacement shall not be treated  as an unsolicited card.  

Renewal contemplates the issuance of a new card on account of expiry of an existing  card and replacement includes issuance of a new card in place of an existing card in  lieu of the change in the underlying account relationship, upgradation due to new  technology or systems or re-issuance of cards that have been lost, blocked or  suspended temporarily, but does not include the opening of a new account after a  previous account was closed.

Master Directions – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 

xxii. Upgradation of Credit Card means enhancement in the benefits and features of  credit cards issued, for example, an increase in the credit or cash limit of the card. 

(b) All other expressions unless defined herein shall have the same meaning as have been  assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act,  1934 or any statutory modification or re-enactment thereto or as used in commercial  parlance, as the case may be. 

CHAPTER – II 

CONDUCT OF CREDIT CARD BUSINESS 

4. Eligibility  

(a) Scheduled Commercial Banks (SCBs) other than Regional Rural Banks (RRBs) with net  worth of ₹100 crore and above are permitted to undertake credit card business either  independently or in tie-up arrangement with other card issuing banks/NBFCs with the  approval of their Boards. SCBs (excluding Small Finance Banks and Regional Rural  Banks) desirous of setting up separate subsidiaries for undertaking credit card business  shall require prior approval of the Reserve Bank. 

(b) RRBs are permitted to issue credit cards in collaboration with their sponsor bank or other  banks.  

(c) Financially sound and well managed Scheduled Urban Cooperative Banks (UCBs) with  minimum networth of ₹100 crore which are CBS enabled may issue Credit Cards subject  to the conditions listed below in addition to the other general conditions applicable to credit  cards:

i. UCBs desirous of issuing credit cards shall submit their application to the  concerned Regional Office of the Reserve Bank with a copy of Board resolution to  that effect. Their application shall be assessed based on the findings of the last  inspection by the Reserve Bank and latest developments, if any.

ii. UCBs are permitted to issue credit cards to their regular members and nominal  members only, but not to non-members. Further, UCBs are not allowed to issue  co-branded credit cards.

iii. The maximum individual limit for a credit card issued to a regular member shall be  kept at the permitted individual unsecured limit as prescribed in the circular  UBD.BPD.(PCB)Cir.No.21/13.05.000/2010-11 dated November 15, 2010 as  amended from time to time. The individual credit card limit together with other  unsecured borrowings by an individual shall not exceed the permissible unsecured  limit for an individual borrower. The credit card limits for nominal members shall be  as prescribed in the circular UBD.No.Plan.PCB.20/09.63.00/96-97 dated October  16, 1996 as amended from time to time.

iv. The total unsecured loans and advances (with surety or without surety or cheque  purchases) granted by a UCB to its members together with cumulative approved  credit card limits shall not exceed 10 percent of its total assets as per audited  balance sheet as on March 31st of the preceding financial year, as prescribed under  exposure norms.

(d) Non-Banking Financial Companies registered with the Reserve Bank shall not undertake  credit card business without prior approval of the Reserve Bank. Any company including  a non-deposit taking company intending to engage in this activity shall require a Certificate  of Registration, apart from specific permission to enter into this business, the pre-requisite  for which is a minimum net owned fund of ₹100 crore and subject to such terms and  conditions as the Reserve Bank may specify in this regard from time to time. Without 

obtaining prior approval from the Reserve Bank, NBFCs shall not issue debit cards, credit  cards, charge cards, or similar products virtually or physically. 

5. Governance Framework 

(a) Each card-issuer shall have a well-documented Board approved policy for the issuance  and conduct of credit cards. The Board approved policy shall be in consonance with  various instructions on the subject issued by the Reserve Bank from time to time, as well  as the directions contained in this Master Direction. The Board approved policy shall be  available on the website of the card-issuer. 

(b) Card-issuers shall put in place a mechanism for review of their credit card operations on  half-yearly basis by the Audit Committee of the Board of Directors. The review shall  include, inter-alia, customer service, frauds, complaints and grievance redressal, card  usage analysis including cards not used for long durations and the inherent risks therein. 

6. Issue of Credit Cards 

(a) Customer Acquisition:

i. Card-issuers shall provide a one-page Key Fact Statement along with the credit  card application containing the important aspects of the card such as rate of  interest, quantum of charges, among others. In case of rejection of a credit card  application, the card-issuer shall convey in writing the specific reason/s which led  to the rejection of the application.

ii. The MITC as given in Chapter VI of these directions, shall be highlighted and  published/sent separately to the customers, at the acceptance stage (welcome kit)  and in important subsequent communications. The MITC shall be provided to the  customer at the time of onboarding and each time, a condition is modified with  notice to the customer. The MITC and copy of the agreement signed between the  card-issuer and cardholder shall be sent to the registered email address of the  cardholder or postal address as per the choice of the customer.

iii. Card-issuers may consider introducing, at the option of the customers, an  insurance cover to take care of the liabilities arising out of lost cards, card frauds,  etc. In cases where the card-issuers are offering any insurance cover to their  cardholders, in tie-up with insurance companies, the card-issuers shall obtain  explicit consent in writing or in digital mode from the cardholders along with the  details of nominee/s. 

iv. The issue of unsolicited cards/upgradation is strictly prohibited. In case, an  unsolicited card is issued/existing card upgraded and activated without the explicit  consent of the recipient and the latter is billed for the same, the card-issuer 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. 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, i.e., for loss of complainant’s time, expenses incurred, harassment and  mental anguish suffered by him/her.

v. There have been instances where unsolicited/applied-for cards have been  misused before reaching the persons in whose names these have been issued. It  is emphasised that any loss arising out of misuse of such unsolicited cards shall  be the responsibility of the card-issuer only and the person in whose name the card  has been issued shall not be held responsible for the same.

vi. Card-issuers shall 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. If no consent is received  for activating the card, card-issuers shall close the credit card account without any  cost to the customer within seven working days from date of seeking confirmation  from the customer. In case of a renewed or replaced card, the closure of an  inactivated card shall be subject to payment of all dues by the cardholder. 

vii. No card-issuer shall report any credit information relating to a new credit card  account to Credit Information Companies prior to activation of the card. Any credit  information relating to such inactivated credit cards already reported to Credit  Information Companies shall be withdrawn immediately; under no circumstances  it shall take more than 30 days from the effective date of these directions.  

viii. The consent for the cards issued or the other products/services offered along with  the card shall be explicit and shall not be implied. In other words, the written  consent of the applicant shall be required before issuing a credit card. Alternatively,  card-issuers may use other digital modes with multifactor authentication to obtain  explicit customer consent. Such alternative digital modes, if any used by the card  issuer, shall be communicated to the Department of Regulation, Reserve Bank of  India. 

ix. Card-issuers shall ensure that the telemarketers they engage, comply with  directions/regulations on the subject issued by the Telecom Regulatory Authority  of India (TRAI) from time to time while adhering to guidelines issued on “Unsolicited  Commercial Communications – National Customer Preference Register (NCPR)”.  The card-issuer’s representatives shall contact the customers only between 10:00  hrs and 19:00 hrs.

x. The decision-making power for issue of credit card to a customer shall remain only  with the card-issuer and the role of the Direct Sales Agent (DSA)/Direct Marketing  Agent (DMA)/other agents shall remain limited to soliciting/servicing the customer/  account.

(b) Underwriting Standards: 

i. Card-issuers shall ensure prudence while issuing credit cards and independently  assess the credit risk while issuing cards to persons, taking into account  independent financial means of applicants. 

ii. As holding several credit cards enhances the total credit available to any  consumer, card-issuers shall assess the credit limit for a credit card customer  taking into consideration all the limits enjoyed by the cardholder from other entities  on the basis of self-declaration/credit information obtained from a Credit  Information Company, as appropriate. This shall be uniformly applied as per the  board approved policy of the card-issuer.

iii. Card-issuers shall ensure complete transparency in the conversion of credit card  transactions to Equated Monthly Instalments (EMIs) by clearly indicating the  principal, interest and upfront discount provided by the merchant/card-issuer (to  make it no cost), prior to the conversion. The same shall also be separately  indicated in the credit card bill/statement. EMI conversion with interest component  shall not be camouflaged as zero-interest/no-cost EMI. 

iv. Card-issuers shall ensure that loans offered through credit cards are in compliance  with the instructions on loans and advances issued by the Reserve Bank from time  to time.

v. Card-issuers shall 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.

7..Types of credit cards 

(a) Card-issuers may issue credit cards/charge cards to individuals for personal use together  with add-on cards wherever required.  

(b) Card-issuers may also issue cards linked to overdraft accounts that are in the nature of  personal loans without any end-use restrictions subject to the conditions as stipulated in  the overdraft account. 

(c) Card-issuers may issue business credit cards to business entities/individuals for business  expenses. The business credit cards may also be issued as charge cards, corporate credit  cards or by linking a credit facility such as overdraft/cash credit provided for business  purpose as per the terms and conditions stipulated for the facility concerned. Corporate  credit cards can be issued together with add-on cards wherever required.  

(d) The liability of the corporate/business entity on account of business cards shall form part  of their total assessed credits for compliance to instructions issued by the Reserve Bank  on Exposure Norms as well as Prudential norms on Income Recognition, Asset  Classification and Provisioning pertaining to Advances.  

(e) The add-on cards shall be issued only to the persons specifically identified by the principal  cardholder under both personal and business credit card categories. Add-on cards shall  be issued with the clear understanding that the liability will be that of the principal  cardholder. Similarly, while issuing corporate credit cards, the responsibilities and  liabilities of the corporate and its employees shall be clearly specified. The liability of the  corporate/business entity shall form part of its assessed credits.  

8. Closure of Credit Card 

(a) Any request for closure of a credit card shall be honoured within seven working days by  the credit card-issuer, subject to payment of all dues by the cardholder. Subsequent to  the closure of credit card, the cardholder shall be immediately notified about the closure  through email, SMS, etc. Cardholders shall be provided option to submit request for  closure of credit card account through multiple channels such as helpline, dedicated e 

mail-id, Interactive Voice Response (IVR), prominently visible link on the website, internet  banking, mobile-app or any other mode. The card-issuer shall not insist on sending a  closure request through post or any other means which may result in the delay of receipt  of the request. Failure on the part of the card-issuers to complete the process of closure  within seven working days shall result in a penalty of ₹500 per day of delay payable to the  customer, till the closure of the account provided there is no outstanding in the account. 

(b) If a credit card has not been used for a period of more than one year, the process to close  the card shall be initiated after intimating the cardholder. If no reply is received from the  cardholder within a period of 30 days, the card account shall be closed by the card-issuer,  subject to payment of all dues by the cardholder. The information regarding the closure  of card account shall also accordingly be updated with the Credit Information  Company/ies within a period of 30 days. 

(c) Subsequent to closure of credit card account, any credit balance available in credit card  accounts shall be transferred to the cardholder’s bank account. Card-issuers shall obtain  the details of the cardholder’s bank account, if the same is not available with them.  

9. Interest rates and other charges 

(a) Card-issuers are directed to be guided by the instructions on interest rate on advances issued by the Reserve Bank as amended from time to time, while determining the interest  rate on credit card dues. Interest charged on credit cards shall be justifiable having regard  to the cost incurred and the extent of return that could be reasonably expected by the  card-issuer. Card-issuers shall also prescribe an interest rate ceiling in line with other  unsecured loans, including processing and other charges, in respect of credit cards as  part of their Board approved policy. In case card-issuers charge interest rates which vary   based on the payment/default history of the cardholder, there shall be transparency in  levying such differential interest rates. The interest rates as prescribed in the board  approved policy and the rationale for the same shall be auditable. The card-issuers shall publicist through their website and other means, the interest rates charged to various  categories of customers. Card-issuers shall indicate upfront to the credit cardholder, the  methodology of calculation of finance charges with illustrative examples, particularly in  situations where only a part of the amount outstanding is paid by the customer.

(b) Further, the card-issuers shall adhere to the following directions relating to interest rates  and other charges on credit cards: 

i. Card-issuers shall quote Annualized Percentage Rates (APR) on credit cards for different situations such as retail purchases, balance transfer, cash advances, non payment of minimum amount due, late payment etc., if different. The method of  calculation of APR shall be given with clear examples for better comprehension. The  APR charged, and the annual fee shall be shown with equal prominence. The late  payment charges, including the method of calculation of such charges and the number  of days, shall be prominently indicated. The manner in which the outstanding unpaid  amount has been arrived at for calculation of interest shall also be specifically shown  with prominence in all the billing statements. These aspects shall also be shown in the  Welcome Kit in addition to being shown in the billing statements.  

ii. 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.  

iii. Card-issuers shall inform the cardholders of the implications of paying only ‘the  minimum amount due’. A legend/warning to the effect that “Making only the minimum  payment every month would result in the repayment stretching over months/years with  consequential compounded interest payment on your outstanding balance” shall be  prominently displayed in all the billing statements to caution the cardholders about the  pitfalls in paying only the minimum amount due. The MITC shall specifically explain  that the ‘interest-free credit period’ is suspended if any balance of the previous month’s  bill is outstanding. The card-issuers shall specify in the billing statement, the level of  unpaid amount of the bill i.e., part payment beyond ‘minimum amount due’, at which  the interest-free credit period benefits would not be available to cardholders. 

iv  For this purpose, card-issuers shall work out illustrative examples and include the  same in the Welcome Kit sent to the cardholders and also place it on their website.

v. Card-issuers shall report a credit card account as ‘past due’ to credit information  companies (CICs) or levy penal charges, viz. late payment charges and other related  charges, if any, only when a credit card account remains ‘past due’ for more than three days. The number of ‘days past due’ and late payment charges shall, however, be  computed from the payment due date mentioned in the credit card statement, as  specified under the regulatory instructions on ‘Prudential norms on Income  Recognition, Asset Classification and Provisioning pertaining to Advances’ amended  from time to time. Penal interest, late payment charges and other related charges shall be levied only on the outstanding amount after the due date and not on the total  amount.

Changes in charges shall be made only with prospective effect giving prior notice of  at least one month. If a cardholder desires to surrender his/her card on account of any  change in charges to his/her disadvantage, he/she shall be permitted to do so without  levying any extra charge for such closure, subject to payment of all dues by the  cardholder.

vii. There shall not be any hidden charges while issuing credit cards free of charge. 

10. Billing 

(a) Card-issuers shall ensure that there is no delay in sending/dispatching/emailing  bills/statements and the customer has sufficient number of days (at least one fortnight)  for making payment before the interest starts getting charged. In order to obviate frequent  complaints of delayed billing, the card-issuer may consider providing bills and statements  of accounts through internet/mobile banking with the explicit consent of the cardholder.  Card-issuers shall put in place a mechanism to ensure that the cardholder is in receipt of  the billing statement. 

(b) Card-issuers shall ensure that wrong bills are not raised and issued to cardholders. In  case, a cardholder protests any bill, the card-issuer shall provide explanation and,  wherever applicable, documentary evidence shall be provided to the cardholder within a  maximum period of 30 days from the date of complaint. 

(c) No charges shall be levied on transactions disputed as ‘fraud’ by the cardholder until the dispute is resolved.

(d) Card-issuers do not follow a standard billing cycle for all credit cards issued. In order to  provide flexibility in this regard, cardholders shall be provided a one-time option to modify  the billing cycle of the credit card as per their convenience. 

(e) Any credit amount arising out of refund/failed/reversed transactions or similar transactions before the due date of payment for which payment has not been made by the cardholder,  shall be immediately adjusted against the ‘payment due’ and notified to the cardholder. 

(f) Card-issuers shall seek explicit consent of the cardholder to adjust credit amount beyond  a cut-off, one percent of the credit limit or ₹5000, whichever is lower, arising out of  refund/failed/reversed transactions or similar transactions against the credit limit for which  payment has already been made by the cardholder. The consent shall be obtained  through e-mail or SMS within seven days of the credit transaction. The card-issuers shall  reverse the credit transaction to the cardholder’s bank account, if no consent/response is  received from the cardholder. Notwithstanding the cut-off, if a cardholder makes a request  to the card-issuer for reversal of the credit amount outstanding in the card account into  his/her bank account, the card-issuer shall do it within three working days from the receipt  of such request. 

11. Issue of unsolicited facilities 

(a) Unsolicited loans or other credit facilities shall not be offered to the credit cardholders without seeking explicit consent. In case an unsolicited credit facility is extended without  the written/explicit consent of the cardholder and the latter objects to the same, the card issuer shall not only withdraw the facility, but also be liable to pay such penalty as may be  considered appropriate by the RBI Ombudsman, if approached. 

(b) Card-issuers shall not unilaterally upgrade credit cards and enhance credit limits. Explicit consent of the cardholder shall invariably be taken whenever there is/are any change/s in  terms and conditions. In case of reduction in the credit limit, the card-issuer shall intimate  the same to the cardholder. 

12. Reporting to Credit Information Companies  

(a) For providing information relating to credit history/repayment record of the cardholder to  a Credit Information Company (that has obtained Certificate of Registration from RBI), the  card-issuer shall explicitly bring to the notice of the customer that such information is being  provided in terms of the Credit Information Companies (Regulation) Act, 2005. 

(b) Before reporting default status of a credit cardholder to a Credit Information Company, the card-issuers shall ensure that they adhere to a procedure, duly approved by their  Board, including issuing of a seven day notice period to such cardholder about the  intention to report him/her as defaulter to the Credit Information Company. In the event  the customer settles his/her dues after having been reported as defaulter, the card-issuer shall update the status within 30 days from the date of settlement. Card-issuers shall be  particularly careful in the case of cards where there are pending disputes. The  disclosure/release of information, particularly about the default, shall be made only after  the dispute is settled. In all cases, a well laid down procedure shall be transparently  followed and be made a part of MITC. 

13. Customer Conduct 

(a) In the matter of recovery of dues, card-issuers shall ensure that they, as also their agents,  adhere to the extant instructions on Fair Practices Code for lenders. 

(b) In particular, with regard to appointment of third-party agencies for debt collection, the  card-issuers shall ensure that their agents refrain from actions that could damage their integrity and reputation and observe strict customer confidentiality. All communications  issued by recovery agents must contain the name, email-id, telephone number and  address of the concerned senior officer of the card-issuer whom the customer can contact. Further, card-issuers shall provide the name and contact details of the recovery agent to  the cardholder immediately upon assigning the agent to the cardholder. 

(c) 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. 

(d) Card-issuers shall ensure to comply with the extant guidelines in respect of engagement  of recovery agents issued by the Reserve Bank, as amended from time to time. (e) The disclosure of customers’ information to the DSAs/DMAs/recovery agents shall also  be limited to the extent that will enable them to discharge their duties. Personal information  provided by the cardholder but not required for recovery purposes shall not be released  by the card-issuer. The card-issuer shall ensure that the DSAs/DMAs/recovery agents do  not transfer or misuse any customer information during marketing of credit card products.

(f) When card-issuers outsource various credit card related operations, they shall be  extremely careful that the appointment of such service providers do not compromise the  quality of the customer service and the card-issuers’ ability to manage credit, liquidity and  operational risks. In the choice of the service provider, the card-issuers shall be guided  by the need to ensure confidentiality of the customer’s records, respect customer privacy  and adhere to fair practices in debt collection. 

(g) Card-issuers shall have a system of random checks and mystery shopping to ensure that  their agents have been properly briefed and trained as to how to handle customers and  are also aware of their responsibilities, particularly with regard to soliciting customers,  hours for calling, privacy of customer information, conveying the correct terms and  conditions of the product on offer. 

(h) Card-issuers shall ensure that their employees/agents do not indulge in mis-selling of  credit cards by providing incomplete or incorrect information to the customers, prior to the  issuance of a credit card. The card-issuers shall also be liable for the acts of their agents. Repetitive complaints received in this regard against any employee/agent shall be taken  on record by the card-issuer and appropriate action shall be initiated against them  including blacklisting of such agents. A dedicated helpline and email-id shall be available  for the cardholders to raise complaints against any act of mis-selling or harassment by  the representative of the card-issuer.  

CHAPTER – III 

ISSUE OF DEBIT CARD BY BANKS 

14. Issue of Debit Card 

a) Banks shall formulate a comprehensive debit cards issuance policy with the approval of  their Boards and issue debit cards to their customers in accordance with this policy. Prior  approval of the Reserve Bank is not necessary for banks desirous of issuing debit cards  to their customers. 

b) Debit cards shall only be issued to customers having Savings Bank/Current Accounts. c) No bank shall issue debit cards to cash credit/loan account holders. However, it will not  preclude the banks from linking the overdraft facility provided along with Pradhan Mantri  Jan Dhan Yojana accounts with a debit card.  

d) Banks shall not force a customer to avail debit card facility and shall not link issuance of debit card to availment of any other facility from the bank.

15. Other Form Factors 

(a) Scheduled Commercial Banks (other than RRBs) may issue other form factors in place of  a plastic debit card such as wearables after obtaining explicit consent from the customer.  (b) Form factors issued in place of a debit card shall be subject to the specific and general  guidelines applicable to debit cards. 

(c) Banks shall provide options for disabling or blocking the form factor through mobile  banking, internet banking, SMS, IVR or any other mode. 

(d) Banks shall submit a detailed report to the Department of Regulation, Reserve Bank of  India, prior to the issuance of any such form factors. Any bank that has already issued  such product prior to the effective date of the Master Direction, shall submit a detailed  report to Department of Regulation within 30 days from the effective date. 

16. Review of operations 

The banks shall undertake review of their operations/issue of debit cards on half-yearly basis.  The review shall include, inter-alia, card usage analysis including cards not used for long  durations and the inherent risks therein. 

CHAPTER – IV 

CO-BRANDING ARRANGEMENT 

17. Issue of Co-branded Cards 

(a) Prior approval of the Reserve Bank is not necessary for the issuance of co-branded debit  cards/co-branded prepaid cards by banks and co-branded credit cards by card-issuers subject to conditions stipulated under this chapter. However, UCBs shall not issue  debit/credit cards in tie-up with other non-bank entities. In addition to the conditions listed  herein, the co-branding arrangement for credit cards, debit cards and prepaid cards shall  also be subject to the specific conditions applicable to such cards. 

(b) The co-branded credit/debit card shall explicitly indicate that the card has been issued  under a co-branding arrangement. 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.  

(c) The co-branded card shall prominently bear the branding of the card-issuer.

18. Board approved policy 

The co-branding arrangement shall be as per the Board approved policy of the card-issuer.  The policy shall specifically address issues pertaining to various risks, including reputation  risk associated with such an arrangement and put in place suitable risk mitigation measures.  Further, the information relating to revenue sharing between the card-issuer and the co 

branding partner entity shall be indicated to the cardholder and also displayed on the website  of the card-issuer. 

19. Due diligence 

Card-issuers shall carry out due diligence in respect of the co-branding partner entity with  which they intend to enter into tie-up for issue of such cards to protect themselves against  the reputation risk they are exposed to in such an arrangement. Card-issuers shall ensure  that in cases where the proposed co-branding partner is a financial entity, it has obtained  necessary approvals from its regulator for entering into the co-branding arrangement. 

20. Outsourcing of activities 

Card-issuers shall also be liable for the acts of the co-branding partner. The card-issuer shall  ensure adherence to the guidelines on ‘Managing Risks and Code of Conduct in Outsourcing  of Financial Services by banks’, as amended from time to time. Card-issuers shall ensure  that cash backs, discounts and other offers advertised by a co-branding partner are delivered  to the cardholder on time. Card-issuers shall be liable for any delay or non-delivery of the  same to the cardholders. 

21. Role of co-branding partner entity 

(a) The role of the co-branding partner entity under the tie-up arrangement shall be limited to  marketing/distribution of the cards and providing access to the cardholder for the  goods/services that are offered. 

(b) The co-branding partner shall not have access to information relating to transactions undertaken through the co-branded card. Post issuance of the card, the co-branding  partner shall not be involved in any of the processes or the controls relating to the co branded card except for being the initial point of contact in case of grievances.

22. Co-branding arrangement between banks and NBFCs for Credit Cards NBFCs, which desire to enter into a co-branding arrangement for issue of credit cards with a  card-issuer, shall also be guided by the Guidelines on issue of Co-Branded Credit Cards  contained in the respective Master Directions applicable to NBFCs, as amended from time to  time. 

CHAPTER – V 

GENERAL GUIDELINES FOR CREDIT AND DEBIT CARDS 

23. General Conditions 

(a) Card-issuers shall keep internal records to enable operations to be traced and errors to  be rectified (taking into account the law of limitation for the time barred cases) as  prescribed under ‘Master Direction on Know Your Customer’, as amended from time to  time. 

(b) The cardholder shall be provided with a record of the transactions after he/she has  completed it, immediately in the form of receipt or another form such as the bank  statement/email/SMS. 

(c) With a view to reducing the instances of misuse of lost/stolen cards, it is recommended  to the card-issuers that they may consider issuing card with advanced features that may  evolve from time to time. 

(d) Card-issuers shall block a lost card immediately on being informed by the cardholder and  formalities, if any, can follow within a reasonable period clearly defined in the Board  approved policy. 

(e) Card-issuers shall provide to the cardholder the detailed procedure to report the loss, theft  or unauthorised use of card or PIN. They shall provide multiple channels such as a  dedicated helpline, dedicated number for SMS, dedicated e-mail-id, Interactive Voice  Response, clearly visible link on the website, internet banking and mobile-app or any other  mode for reporting an unauthorized transaction on 24 x 7 basis and allow the customer to  initiate the blocking of the card. The process for blocking the card, dedicated helpline as  well as the SMS numbers, shall be adequately publicized and included in the billing 

statements.  

(f) Card-issuers shall immediately send a confirmation to the cardholder subsequent to the  blocking of a card. 

(g) No card-issuer shall dispatch a card to a customer unsolicited, except in the case where  the card is a replacement/renewal of a card already held by the customer. In case a card  is blocked at the request of the customer, replacement card in lieu of the blocked card  shall be issued with the explicit consent of the customer. Further, card-issuer shall obtain  explicit consent of the cardholder prior to the renewal of an existing card. 

(h) Any discounts, cashbacks, reward points, loyalty points or any other benefits offered by  the card-issuer shall be provided in a transparent manner including source of such  benefits. The accounting process for the same shall be verifiable in the books of the card issuer. Detailed information regarding these benefits shall be displayed on the website of  the card-issuer and a copy of the same shall also be provided to the cardholder. 

(i) In case of an insurance cover provided with a card, card-issuers shall ensure that the  relevant nomination details are recorded by the Insurance Company and the availability  of insurance is included, along with other information, in every statement. The information  shall also include the details regarding the insurance cover, name/address and telephone  number of the Insurance Company which will handle the claims relating to the insurance  cover. 

24. Terms and conditions for issue of cards to customers 

(a) The relationship between the card-issuer and the cardholder shall be contractual. Card issuers shall make available to the cardholders in writing, a set of contractual terms and  conditions governing the issue and use of such cards. These terms shall be expressed  clearly and also maintain a fair balance between the interests of the parties concerned. 

(b) The terms and conditions for the issue and usage of a card shall be mentioned in clear  and simple language (preferably in English, Hindi and the local language) comprehensible  to the cardholder. 

(c) Card-issuers shall not levy any charge that was not explicitly indicated to the cardholder at the time of issue of the card and without getting his/her explicit consent. However, this  shall not be applicable to charges like service taxes which may subsequently be levied by  the Government or any other statutory authority. The details of all the charges associated  with cards shall be displayed on the card-issuer’s website. 

(d) The convenience fee, if any charged on specific transactions, shall be indicated to the  cardholder in a transparent manner, prior to the transaction. 

(e) The terms shall clearly specify the time-period for reversal of unsuccessful/failed  transactions and the compensation payable for failure to meet the specified timeline. (f) The terms may be altered by the card-issuer, but 30 days’ notice of the change shall be  given to the cardholder to enable him/her to withdraw if he/she so chooses. After the  notice period of 30 days, the cardholder would be deemed to have accepted the terms if  he/she had not withdrawn during the specified period. The change in terms shall be  notified to the cardholder through all the communication channels available.  

(g) The terms shall put the cardholder under an obligation to take all appropriate steps to  keep the card safe and not to record the PIN or code, in any form that would be intelligible  or otherwise accessible to any third party if access is gained to such a record, either  honestly or dishonestly. 

(h) The terms shall specify that the card-issuer shall exercise care when issuing PINs or  codes and shall be under an obligation not to disclose the cardholder’s PIN or code to  anyone, except to the cardholder. 

25. Compliance with Other instructions 

The issue of cards as a payment mechanism shall also be subject to relevant instructions on  cash withdrawal, issue of international card, security issues and risk mitigation measures,  card-to-card fund transfers, merchant discount rates structure, failed ATM transactions, etc,  issued by the Department of Payment and Settlement Systems, Reserve Bank of India under  the Payment and Settlement Systems Act, 2007, and the Foreign Exchange Department,  Reserve Bank of India under Foreign Exchange Management Act, 1999, as amended from  time to time. 

26. Redressal of grievances 

(a) Card-issuers shall put in place a Grievance Redressal Mechanism within the card issuing  entity and give wide publicity about it through electronic and print media. The name, direct  contact number, email-id and postal address of the designated grievance redressal officer  of the card-issuer shall be mentioned on the credit card bills and account statements. The  designated officer shall ensure that grievances of cardholders are redressed promptly  without any delay. Specific timelines may be stipulated in the Board approved policy for  issuance of cards, redressal of grievances and compensation framework. The grievance  redressal procedure and the Board approved policy shall be displayed on the website of  the card-issuer with a clearly visible link on the homepage 

(b) Card-issuers shall ensure that their call centre staff are trained adequately to competently  handle and escalate, a complaint, if necessary. The Grievance Redressal process shall  have a provision for automatic escalation of unresolved complaints from a call center/base level to higher authorities. There shall be a system of acknowledging customers’  complaints for follow up, such as complaint number/docket number, even if the complaints  are received over phone. 

(c) Card-issuers shall be liable to compensate the complainant for the loss of his/her time,  expenses, financial loss as well as for the harassment and mental anguish suffered by  him/her for the fault of the card-issuer and where 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  his/her grievance/s. 

27. Confidentiality of customer information 

(a) Card-issuers shall not reveal any information relating to customers obtained at the time  of opening the account or issuing the card to any other person or organization without  obtaining their explicit consent, with regard to the purpose/s for which the information will  be used and the organizations with whom the information will be shared. Card-issuers  shall ensure strict compliance to the extant legal framework on data protection. Further,  in case where the customers give explicit consent for sharing the information with other  agencies, card-issuers shall explicitly state and explain clearly to the customer the full  meaning/implications of the disclosure clause. The information sought from customers  shall not be of such nature which will violate the provisions of law relating to maintenance  of secrecy in the transactions. The card-issuers shall be solely responsible for the  correctness or otherwise of the data provided for the purpose. 

(b) Under a co-branding arrangement, the co-branding entity shall not be permitted to access  any details of customer’s accounts that may violate the card-issuer’s secrecy obligations. (c) Card-issuers, which were granted specific approvals for issue of co-branded debit cards  in the past, are advised to ensure that the co-branding arrangement is in conformity with  the instructions issued under Chapter IV above. In case, the co-branding arrangement is  between two banks, the card issuing bank shall ensure compliance with the relevant  instructions. 

28. Outsourcing of various services 

Card-issuers shall ensure adherence to the guidelines on “Managing Risks and Code of  Conduct in Outsourcing of Financial Services” as amended from time to time.

29. Compliance with Know Your Customer (KYC) Norms/Anti-Money Laundering (AML)  Standards/Combating of Financing of Terrorism (CFT)/Obligation under the PMLA,  2002 

The instructions/Directions on KYC/AML/CFT issued by RBI from time to time, shall be strictly  adhered to in respect of all cards issued, including co-branded cards. 

CHAPTER – VI 

MISCELLANEOUS 

30. Contents of the Most Important Terms and Conditions  

Card-issuers shall provide to the cardholder the term-sheet containing the MITC. The  document should contain the following details: 

(a) Fees and Charges 

i. Joining fees for primary cardholder and for add-on cardholder/s 

ii. Annual membership fees for primary and add-on cardholder/s 

iii. Cash advance fee 

iv. Service charges levied for transactions 

v. Interest free (grace) period – illustrated with examples 

vi. Finance charges for both revolving credit and cash advances 

vii. Overdue interest charges – to be given on monthly & annualised basis viii. Charges in case of default 

(b) Drawal Limits 

i. Credit limit 

ii. Available credit limit 

iii. Cash withdrawal limit 

(c) Billing 

i. Billing statements – periodicity and mode of sending 

ii. Minimum amount payable 

iii. Method of payment 

iv. Billing disputes resolution 

v. Complete postal address of card-issuer 

vi. Toll free number, email-id and dedicated telephone number for SMS for customer care  services, contact details of Grievance Redressal Official

(d) Default and Circumstances 

i. Procedure including notice period for reporting a cardholder as defaulter

ii. Procedure for withdrawal of default report and the period within which the default  report would be withdrawn after settlement of dues 

iii. Recovery procedure in case of default 

iv. Recovery of dues in case of death/permanent incapacitance of cardholder v. Available insurance cover, if any, for cardholder and date of activation of policy including nomination details 

(e) Termination/Revocation of Card Membership 

i. Procedure for surrender/closure of card by cardholder 

ii. Link provided exclusively for the above on the website 

iii. Contact details for the cardholder to initiate closure – email-id, dedicated telephone  number for SMS, IVRS 

iv. Procedure for closure of card account if the card has not been used for more than one year 

(f) Loss/Theft/Misuse of Card 

i. Procedure to be followed in case of loss/theft/ misuse of card – mode of intimation to  card-issuer 

ii. Prominently visible web-site link, phone banking, SMS, e-mail, IVR, a dedicated toll free helpline, reporting to home branch, etc. for reporting unauthorised transactions  and initiating blocking of card 

iii. Liability of cardholder in case of (i) above in terms of RBI circular ref.  DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017 on ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ as  updated from time to time. 

(g) Grievance Redressal and Compensation Framework 

i. Grievance redressal and escalation process 

ii. Timeline for redressal of grievances 

iii. Compensation framework for unsuccessful/failed transactions, delay in redressal of  grievance, delay in closing of account/blocking of lost or stolen cards, etc.

 iv. Contact particulars of card-issuer – 24-hour call centres, email-ids, helpline, other  important telephone numbers

(h) Disclosure 

Type of information relating to cardholder to be disclosed with and without approval of  cardholder 

31. Disclosure of the MITC – Items to be disclosed in stages: 

(a) During marketing – Item no: 30(a) 

(b) At application – Key fact statement containing items from 30(a to c) and any additional  information that the customer may desire. 

(c) Welcome kit – Item nos: all items from 30(a to h) 

(d) On billing – Item nos: 30(a, b and c) 

(e) On an ongoing basis, any change of the terms and conditions 

(f) Note: 

i. The font size of MITC shall be minimum Arial-12 

ii. The normal terms and conditions communicated by the card-issuer to the cardholder at different stages shall continue as hitherto. 

CHAPTER – VII 

EXEMPTIONS, INTERPRETATIONS AND REPEAL 

32. Exemptions 

The Reserve Bank of India may, if it considers necessary for avoiding any hardship or for any  other just and sufficient reason, grant extension of time to comply with or exempt any  Regulated Entities, from all or any of the provisions of these Directions either generally or for  any specified period, subject to such conditions as the Reserve Bank of India may impose. 

33. Interpretations 

For the purpose of giving effect to the provisions of these Directions, the Reserve Bank of  India may, if it considers necessary, issue necessary clarifications in respect of any matter  covered herein and the interpretation of any provision of these Directions given by the  Reserve Bank of India shall be final and binding on all the parties concerned.

23 

Master Directions – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 34. Repeal 

(a) With the issue of these directions, the instructions/guidelines contained in the following  circulars, issued by the Reserve Bank stand repealed.

No	Circular No.	Date	Subject
1.	DOR.FSD.BC.No.67/24.01. 041/2019-20	April 23,   2020	Electronic Cards for Overdraft   Accounts
2.	DCBR.BPD. (PCB/RCB).  Cir.No.1/16.20.000/2015-16	July 16,   2015	Guidelines on issue of ATM-cum-debit  cards
3.	DBR.No.FSD.BC.18/24.01.0 09/2015-16	July 1, 2015	Master Circular on Credit Card, Debit  Card and Rupee Denominated Co branded Pre-paid Card Operations of  Banks and Credit Card issuing NBFCs
4.	DBOD.No.FSD.BC.30/24.01 .001/2013-14	July 15,   2013	Unsolicited Commercial   Communications – National Customer  Preference Register (NCPR)
5.	DBOD.No.FSD.BC.67/24.01 .019/ 2012-13	December   12, 2012	Issuance of Rupee denominated Co branded Pre-paid Cards
6.	DBOD.No.FSD.BC.66/24.01 .019/ 2012-13	December   12, 2012	Guidelines for issue of Debit Cards by  Banks
7.	DBOD.FSD.BC.No.25/24.01 .011/2010-11	July 9, 2010	Credit Card Operations of Banks
8.	DBOD.No.FSD.BC.45/24.01 .011/2008-09	September  17, 2008	Unsolicited Commercial   Communications – National Do Not  Call (NDNC) Registry
9.	DBOD.FSD.BC.23/24.01.01/  2008-09	July 23,   2008	Credit Card Operations of Banks
10.	DBOD.FSD.BC.35/24.01.01 1/2007-08	October 19,  2007	Unsolicited Commercial   Communications –National Do Not Call  Registry
11.	UBD (PCB) Cir No. 6   /09.18.300/2007-08	July 13,   2007	Guidelines for issue of ATM-cum-Debit  Cards by UCBs

24 

Master Directions – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 

12.	DBOD.FSD.BC.19/24.01.01 1/2007-08	July 3, 2007	Unsolicited Commercial   Communications – National Do Not  Call Registry
13.	DBOD. FSD. BC. No.   49/24.01.011/ 2005-06	November   21, 2005	Credit Card Operations by banks
14.	DBOD.No.FSC.BC.120/24.0 1.011/2000- 01	May 12,   2001	Credit Card Business of Banks
15.	DBOD.No.FSC.BC.41/24.01 .011/2000-01	October 30,  2000	Issue of Credit/Debit Cards by Banks
16.	DBOD.No.FSC.BC.50/24.01 .011/1997-98	June 2,   1998	Entry of Banks into Domestic Credit  Card Business
17.	DBOD.No.FSC.BC.152/24.0 1.01/1997-98	December   9, 1997	Domestic Credit Card Business of  Banks
18.	DBOD.No.FSC.BC.47/C.46 9-1990-91	November   7, 1990	Entry of Banks into Domestic Credit  Card Business
19.	DBOD.No.BP(FSC).BC.144/ C.4691988-89	June 30,   1989	Entry of Banks into Domestic Credit  Card Business

(b) All approvals/acknowledgements given under the above circulars shall be deemed as  given under these directions. 

(c) All the repealed circulars are deemed to have been in force during the relevant periods,  prior to the coming into effect of these directions.

Annex 

Illustration on calculation of Minimum Amount Due (MAD) 

The outstanding amount of a credit card account at the end of month A is ₹10,000. Interest  is calculated at a rate of 2% per month. Therefore, if the total outstanding is not paid on or  before the due date, it would require payment of interest of ₹200 (2% of 10,000) along with  tax and other charges of ₹50 (indicative figure) totalling to ₹250 in addition to the outstanding. 

2. The MAD for the month A shall be calculated in a way that it does not result in negative  amortization. Accordingly, the MAD shall not be less tan ₹250 (indicative figure), so as to  avoid capitalisation of interest or other charges in the subsequent statement.