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RBI Implements New Regulations for Business Credit and Debit Cards
The Reserve Bank of India (RBI) has issued new guidelines for credit and debit cards used by businesses. Here’s a breakdown of the key points:
- Card issuers can’t share customer data with outsourcing partners unless it’s essential for their services. Even then, explicit customer consent is mandatory. Card issuers retain ownership and storage of card data.
- Business card issuers must implement a system to track how card funds are being used.
- Customer transaction data can be displayed on co-branding partner platforms, but only in an encrypted form directly from the card issuer’s system. The co-branding partner cannot store this data.
RBI FAQs on Credit and Debit Cards:
- Interest and late payment charges apply only to the outstanding amount after the due date, not the entire amount.
- Credit card issuers cannot charge interest on unpaid taxes or other charges.
- It’s illegal to issue credit cards without a customer’s consent. If you receive one, don’t activate it and inform the issuer to close the account.
- Banks can offer credit cards that allow access to funds from existing loan accounts (overdraft, cash credit, etc.), with terms matching the loan agreement.
- Consent for activation/closure of business credit cards can be obtained from the company applying for the card, unless otherwise specified.
- Credit card issuers with more than 10 lakh cards must offer customers the option to choose between different card networks (RuPay, Amex, Mastercard, Visa) at issuance or renewal. Existing cardholders can switch networks during renewal. Issuers cannot have agreements with networks that restrict them from using other networks.
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