Strictly follow guidelines on Credit Cards: RBI
RBI has earlier also advised the banks that they should have a ceiling rate of interest and also on processing charges for loans of small value. It has also said that there should be transparency in levying of differential interests.
AFTER A public outcry over the shabby manner in which the Indian banks treat the credit card holders, the Reserve Bank of India has come up with a fresh warning asking banks to strictly follow the RBI guidelines on credit card operations in letter and spirit. RBI has warned that it could be constrained to initiate penal action if the rules and regulations as per the Master Circular on Credit Card Operations are violated. Banks / NBFCs have also been advised that they should indicate to the credit card holder upfront, 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. RBI said that despite comprehensive instructions, it was being seen that the Banking Ombudsmen were receiving numerous complaints from Credit Card holders. These complaints pertained to excessive finance charges, issuance of unsolicited credit cards, unsolicited insurance policies and recovery of premium charges, charging of annual fee in spite of being offered as ‘free’ cards, issuance of loans over phone, disputes over wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, offensive calls, difficulty in accessing the credit card issuers and the poor response from the call centres etc.
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