The Reserve Bank of India has rolled out updated regulations to improve transparency, consumer safety, and responsible lending in the credit card segment. The RBI Guidelines for Credit Card Issuers 2025 introduce strict measures affecting banks, NBFCs, and fintech-based issuers. Here are the key highlights you need to know:
1. OTP-Based Consent for Card Issuance
What’s Changed:
Credit cards must only be issued after OTP-based consent from the applicant.
Impact:
Eliminates unsolicited card issuance and reduces identity theft.
2. Card Activation Deadline
What’s Changed:
If a card remains inactive for 30 days, the issuer must seek consumer acknowledgment. If still inactive, the card must be cancelled without charges.
Impact:
Prevents passive liabilities and hidden fees on unused cards.
3. Mandatory Fee Disclosure
What’s Changed:
Issuers must disclose all fees—including joining, annual, and interest rates—at the time of onboarding. Any changes to charges require 30 days’ advance notice.
Impact:
Greater fee transparency and more informed decision-making for consumers.
4. Improved Billing and Grace Periods
What’s Changed:
A minimum 14-day grace period is mandatory for all billing cycles. Interest cannot be charged if full payment is made within this period.
Impact:
Prevents interest-related surprises and eases repayment timelines.
5. Consent-Based EMI Conversions
What’s Changed:
All EMI conversions now require explicit consent—via OTP or written/email confirmation.
Impact:
No more auto-conversions or hidden EMI traps.
6. Streamlined Card Closure Process
What’s Changed:
Cards must be closed within 7 working days upon request. Delay attracts a ?500 per day penalty.
Impact:
Faster exit for dissatisfied customers and strict accountability for issuers.
7. Controlled Credit Limit Enhancements
What’s Changed:
Issuers cannot raise limits without consumer’s signed or digital approval. Notification of change is mandatory.
Impact:
Protects users from over-borrowing and promotes financial discipline.
8. Mandatory Credit Reporting and Error Resolution
What’s Changed:
All card activities must be reported to credit bureaus. Any errors must be resolved within 30 days of the complaint.
Impact:
Improves credit score management and enables quick dispute resolution.
9. Transparent Rewards & Expiry Rules
What’s Changed:
Issuers must declare reward point expiry rules and give a 30-day notice before any changes.
Impact:
Ensures fair redemption and clarity in loyalty programs.
Special Guidelines for Fintech and Co-Branded Credit Cards
10. Legal Responsibility in Co-Branded Cards
What’s Changed:
Banks/NBFCs issuing co-branded cards (like Flipkart Axis or Amazon ICICI) must handle all consumer grievances and compliance obligations.
Impact:
Direct accountability regardless of partner branding.
11. Digital-First Credit Cards Oversight
What’s Changed:
Fintech-issued digital-first cards must follow full KYC, data protection, and RBI-mandated marketing rules.
Impact:
Aligns digital offerings with traditional banking safeguards.
Consumer Rights Under RBI Guidelines for Credit Card Issuers 2025
| Area | Old Practice | 2025 Guidelines |
|---|---|---|
| Card Closure | Opaque and delayed | 7-day timeline with penalty for delay |
| EMI Conversions | Often automatic | Explicit consent mandatory |
| Billing Periods | Variable grace periods | Minimum 14-day post-bill period required |
| Credit Limit Changes | Frequently unsolicited | Consent-based only |
| Card Activation | Cards left idle without action | Deactivation after 30 days of inactivity |
Advice for Consumers in 2025
- Always read the welcome kit and fee schedule thoroughly.
- Use credit cards responsibly—avoid falling for pre-approved traps.
- Review your credit report regularly for accuracy.
- Track changes in reward programs and use loyalty benefits before expiry.
- Use the cooling-off period wisely before committing to new cards.
The RBI Guidelines for Credit Card Issuers 2025 aim to bring more transparency, control, and fairness to India’s credit card ecosystem. Stay informed and proactive to protect your financial well-being.
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