CREDIT CARD OPERATIONS OF BANKS

Basic Features
The term credit card usually/e!erally re"ers t# a $lastic card assi!ed t# a cardh#lder% usually
&ith a credit limit% that ca! 'e used t# $urchase ##ds a!d ser(ices #! credit #r #'tai! cash
ad(a!ces)
The credit card scheme i!(#l(es "#ll#&i! $arties (i*)
a) Card h#lders + $ers#!s &h# are auth#ri*ed t# use the cards
b) Card Issuers , i!stituti#!s &hich issue credit cards
c) -ercha!ts , e!tities &hich aree t# acce$t credit cards "#r $ayme!t #"
.##ds / Ser(ices)
d) -ercha!t ac0uires , Ba!1s/NBFCs &hich e!ter i!t# areeme!ts &ith mercha!ts t#
Pr#cess their credit card tra!sacti#!s2 a!d
e) Credit Card Ass!) , Ora!i*ati#!s that lice!se card issuers t# issue credit cards
3!der their trade mar1 e)) 4isa a!d -aster Card a!d
Pr#(ide settleme!t ser(ices "#r their mem'ers 5i)e) card
Issuers a!d mercha!t ac0uirers6)
Credit cards ca! 'e 'r#adly cate#ri*ed i!t# t&# ty$es (i*) .e!eral $ur$#se cards a!d
$ri(ate la'el cards) The "#rmer are issued u!der the trademar1 #" credit card ass#ciati#!s
54ISA a!d -aster Card6 a!d acce$ted 'y ma!y mercha!ts &hile the latter are #!ly
acce$ted 'y s$eci"ic retailers 5e)) a de$artme!tal st#re6)
Ba!1s i! I!dia &ith !et &#rth #" Rs) 788 cr#res a!d a'#(e ca! u!derta1e credit card
'usi!ess either de$artme!tally #r thr#uh a su'sidiary c#m$a!y set u$ "#r the $ur$#se)
Pri#r a$$r#(al #" the Reser(e Ba!1 is !#t !ecessary "#r 'a!1s desir#us #" u!derta1i!
credit card 'usi!ess either i!de$e!de!tly #r i! tie,u$ arra!eme!t &ith #ther card issui!
'a!1s% 'ut &ith the a$$r#(al #" their B#ards)) Ba!1s desir#us #" setti! u$ se$arate
su'sidiaries "#r u!derta1i! credit card 'usi!ess &#uld% h#&e(er% re0uire $ri#r a$$r#(al
#" the Reser(e Ba!1))
-#st #" the card issui! 'a!1s i! I!dia #""ers e!eral $ur$#se credit cards &hich are
!#rmally cate#rised 'y 'a!1s as $lati!um% #ld #r classic t# di""ere!tiate the ser(ices
#""ered #! each card a!d the i!c#me elii'ility criteria)
Ba!1s may als# issue c#r$#rate credit cards t# the em$l#yees #" their c#r$#rate
cust#mers)
Fair Practices Code
Each 'a!1 must ha(e a &ell d#cume!ted $#licy a!d a Fair Practices C#de i! li!e &ith the C#de
#" Ba!19s C#mmitme!t t# Cust#mers5C#de6 as als# the .uida!ce N#te a!!#u!ced 'y The
Ba!1i! C#des a!d Sta!dards #" I!dia5BCSBI6 i! :uly ;88< a!d Decem'er ;88< res$ecti(ely "#r
credit card #$erati#!s)
Issue of cards , .uideli!es
Ba!1s/NBFCs sh#uld assess i!de$e!de!tly the credit ris1 a!d e!sure $rude!ce &hile
issui! credit cards t# $ers#!s% es$ecially t# stude!ts a!d #thers &ith !# i!de$e!de!t
"i!a!cial mea!s) As h#ldi! #" se(eral credit cards e!ha!ce the credit limit t# the credit
card h#lder% 'a!1s sh#uld assess the credit limit #! the 'asis #" sel" declarati#!/credit
i!"#rmati#!)
Ba!1s/NBFCs sh#uld c#!(ey i! &riti!s the mai! reas#!/reas#!s "#r re=ecti#! #" the l#a!
a$$licati#!s "#r credit cards)
The card issuers are s#lely res$#!si'le "#r "ul"illme!t #" all K>C re0uireme!ts% e(e!
&here DSAs / D-As #r #ther ae!ts s#licit 'usi!ess #! their 'ehal")
?hile issui! cards% the m#st im$#rta!t terms a!d c#!diti#!s "#r issue a!d usae #" a
credit card sh#uld 'e me!ti#!ed i! clear% u!am'iu#us a!d sim$le la!uae 5$re"era'ly
i! E!lish% @i!di a!d the l#cal la!uae6 c#m$rehe!si'le t# a card user)
Interest rates and other charges
Credit card dues are i! the !ature #" !#!,$ri#rity sect#r $ers#!al l#a!s a!d as such%
i!terest &#uld 'e chared #! the am#u!t due at the issui! 'a!19s Base Rate system
i!stead #" BPAR system &ith e""ect "r#m :uly 87% ;878)
Ba!1s/NBFCs are re0uired t# mai!tai! tra!s$are!cy i! res$ect #" $rescri'i! ceili! rate
#" i!terest a!d they sh#uld $u'lish thr#uh their &e'site a!d #ther mea!s the i!terest
rates chares t# (ari#us cate#ries #" cust#mers) Ba!1s/NBFCs sh#uld u$"r#!t i!dicate
t# the credit card h#lder% the meth#d#l#y #" calculati#! #" "i!a!ce chares &ith
illustrati(e)
Ba!1s/NBFCs ha(e t# e!sure that there is !# delay i! dis$atchi! 'ills a!d the cust#mer
has su""icie!t !um'er #" days 5at least #!e "#rt!iht6 "#r ma1i! $ayme!t 'e"#re the
i!terest starts etti! chared s# as t# #'(iate the "re0ue!t c#m$lai!ts #" delayed 'illi!)
They may als# c#!sider $r#(idi! 'ills a!d stateme!ts #" acc#u!ts #!li!e% &ith suita'le
security 'uilt there"#re)
Ba!1s/NBFCs sh#uld 0u#te A!!uali*ed Perce!tae Rates 5APR6 #! card $r#ducts
5se$arately "#r retail $urchase a!d "#r cash ad(a!ce% i" di""ere!t6 &ith meth#d #"
calculati#! al#! &ith a c#u$le #" eBam$les "#r 'etter c#m$rehe!si#!) The APR chared
a!d the a!!ual "ee a!d the ma!!er i! &hich the #utsta!di! u!$aid am#u!t &ill 'e
i!cluded "#r calculati#! #" i!terest sh#uld als# 'e s$eci"ically sh#&! &ith $r#mi!e!ce i!
all m#!thly stateme!ts) Im$licati#!s #" $ayi! #!ly 9the mi!imum am#u!t due9 sh#uld
als# 'e eB$lai!ed t# the card h#lders $re"era'ly i! the ?elc#me Kit 'ei! se!t a!d #! the
card issuers9 &e'site)
The 'a!1s /NBFCs sh#uld !#t le(y a!y chare that &as !#t eB$licitly i!dicated t# the
credit card h#lder at the time #" issue #" the card a!d &ith#ut etti! his / her c#!se!t)
Cha!es i! chares 5#ther tha! i!terest6 may 'e made #!ly &ith $r#s$ecti(e e""ect i(i!
!#tice #" at least #!e m#!th) There sh#uld 'e tra!s$are!cy 5&ith#ut a!y hidde! chares6
i! issui! credit cards "ree #" chare duri! the "irst year)
Wrongful billing
Ba!1/NBFC sh#uld e!sure that &r#! 'ills are !#t raised a!d issued t# cust#mers) A!y
rie(a!ces% #! this c#u!t% sh#uld 'e redressed amica'ly t# the cust#mer &ithi! a maBimum
$eri#d #" siBty days)
Use of DSAs / DMAs and other agents
Ba!1s /NBFCs% &hile #uts#urci! the (ari#us credit card #$erati#!s% sh#uld eBtremely
care"ul that the a$$#i!tme!t #" such ser(ice $r#(iders d#es !#t c#m$r#mise &ith the
0uality #" the cust#mer ser(ice a!d the 'a!1sC/NBFCsC a'ility t# ma!ae credit% li0uidity%
#$erati#!al ris1s a!d the c#!"ide!tiality #" the cust#mer9s rec#rds% res$ect cust#mer
$ri(acy% a!d adhere t# "air $ractices i! de't c#llecti#!)
Ba!1s/NBFCS sh#uld $rescri'e a C#de #" C#!duct "#r their Direct Sales Ae!ts 5DSAs6
&h#se ser(ices are e!aed 'y 'a!1s "#r mar1eti! their $r#ducts/ser(ices a!d "urther
e!sure that the DSAs scru$ul#usly adhere t# the C#de #" C#!duct a!d the same may 'e
dis$layed #! the i!di(idual 'a!19s/NBFC9s &e'site a!d 'e a(aila'le easily t# a!y credit
card h#lder)
The 'a!1/NBFC sh#uld ha(e a system #" ra!d#m chec1s t# e!sure that their ae!ts ha(e
'ee! $r#$erly 'rie"ed a!d trai!ed a!d c#!(eyi! the c#rrect terms a!d c#!diti#!s #" the
$r#duct #! #""er a!d cust#mers9 $ri(acy% etc) The card issui! 'a!1/NBFC &#uld 'e
res$#!si'le as the $ri!ci$al "#r all acts #" #missi#! #r c#mmissi#! #" their ae!ts 5DSAs /
D-As a!d rec#(ery ae!ts6)
Protection of Customer Rights !uidelines
Cust#mer9s rihts i! relati#! t# credit card #$erati#!s $rimarily relate t# $ers#!al $ri(acy% clarity
relati! t# rihts a!d #'liati#!s% $reser(ati#! #" cust#mer rec#rds% mai!tai!i! c#!"ide!tiality
#" cust#mer i!"#rmati#! a!d "air $ractices i! de't c#llecti#!)
Right to "ri#ac$
Card issui! 'a!1s/NBFCs a(#id issua!ce #" u!s#licited cards &hich attracts $e!alty
'esides such $ers#!s a$$r#achi! the Ba!1i! Om'udsma! "#r c#m$e!sati#! "#r l#ss #"
time% eB$e!ses% harassme!t a!d me!tal a!uish% etc)
It is the res$#!si'ility #" the card issui! 'a!1/NBFC "#r a!y misuse #" the u!s#licited
cards a!d the $ers#! i! &h#se !ame the card is issued ca!!#t 'e held res$#!si'le "#r the
same)
The c#!se!t "#r the cards issued #r the #ther $r#ducts #""ered al#! &ith the card has t#
'e eB$licit a!d sh#uld !#t 'e im$lied)
3!s#licited l#a!s #r #ther credit "acilities sh#uld !#t 'e #""ered t# the credit card
cust#mers)
The card issui! 'a!1/NBFC sh#uld !#t u!ilaterally u$rade credit cards a!d e!ha!ce
credit limits #r e""ect a!y cha!e i! terms a!d c#!diti#!s &ith#ut $ri#r c#!se!t #" the
card h#lders)
-ai!te!a!ce #" the D# N#t Call Reistry 5DNCR6 a!d strict c#m$lia!ce #" a(#idi!
u!s#licited calls/S-S "#r mar1eti! #" the $r#ducts sh#uld 'e $ut i! $lace)
Pr#$er m#!it#ri! #" the calls 'ei! made 'y DSAs/ D-As /Call Ce!ters "#r mar1eti!
$ur$#ses sh#uld 'e made s# as t# ha(e a healthy $ractice)
Ba!1s sh#uld !#t e!ae Telemar1eters 5DSAs/D-As6 &h# d# !#t ha(e a (alid
reistrati#! certi"icate "r#m D#T% .#(t) #" I!dia% as telemar1eters)
Ba!1s sh#uld "ur!ish the list #" Telemar1eters 5DSAs/D-As6 e!aed 'y them al#!
&ith the reistered tele$h#!e !um'ers 'ei! used 'y them "#r ma1i! telemar1eti! calls
t# IBA t# e!a'le IBA t# "#r&ard the same t# TRAI)
As $er the laid d#&! $r#cedure% the telemar1eter 5DSAs/D-As6 shall et aut#matically
reistered &ith NDNC Reistry &hile they reister themsel(es &ith D#T)
As IBA &ill 'e the c#,c##rdi!ati! ae!cy at the i!dustry le(el t# e!sure c#m$lia!ce
&ith the re0uireme!ts #" TRAI reulati#!s% 'a!1s are ad(ised t# acti(ely c##$erate &ith
IBA i! this reard% etc)
Customer confidentialit$
C#!"ide!tiality i! res$ect #" cust#mer details sh#uld 'e mai!tai!ed a!d 'a!1s/NBFCs
sh#uld !#t re(eal a!y i!"#rmati#! &ith#ut #'tai!i! s$eci"ic c#!se!t #" the cust#mers i!
&riti!)
I! case #" $r#(idi! i!"#rmati#! relati! t# credit hist#ry / re$ayme!t rec#rd #" the card
h#lder t# a credit i!"#rmati#! c#m$a!y 5s$eci"ically auth#ri*ed 'y RBI6% the 'a!1/NBFC
may eB$licitly 'ri! t# the !#tice #" the cust#mer that such i!"#rmati#! is 'ei! $r#(ided
i! terms #" the Credit I!"#rmati#! C#m$a!ies 5Reulati#!6 Act% ;88D)
Re$#rti! de"ault status #" a credit card h#lder t# the Credit I!"#rmati#! Bureau #" I!dia
Atd) 5CIBIA6 #r a!y #ther credit i!"#rmati#! C#m$a!y auth#ri*ed 'y RBI% 'a!1s/NBFCs
sh#uld e!sure that they adhere t# a $r#cedure% duly a$$r#(ed 'y their B#ard% i!cludi!
issui! #" su""icie!t !#tice t# such card h#lder a'#ut the i!te!ti#! t# re$#rt him/ her as
de"aulter t# the Credit I!"#rmati#! C#m$a!y)
The discl#sure t# the DSAs / rec#(ery ae!ts sh#uld als# 'e limited t# the eBte!t that &ill
e!a'le them t# dischare their duties)
Fair Practices in debt collection
I! the matter #" rec#(ery #" dues% 'a!1s sh#uld e!sure that they% as als# their ae!ts%
adhere t# the eBta!t i!structi#!s #! Fair Practice C#de as als# BCSBI9s C#de #" Ba!19s
C#mmitme!t t# Cust#mers 5 &here(er a$$lica'le6)
It is als# e!sured that &hile a$$#i!ti! third $arty ae!ts "#r de't c#llecti#!% the ae!ts
sh#uld re"rai! "r#m acti#! that c#uld damae the i!terity a!d re$utati#! #" the
'a!1/NBFC a!d that they #'ser(e strict cust#mer c#!"ide!tiality)
Ba!1s /NBFCs / their ae!ts sh#uld !#t res#rt t# i!timidati#! #r harassme!t #" a!y 1i!d%
either (er'al #r $hysical% aai!st a!y $ers#! i! their de't c#llecti#! e""#rts% i!cludi! acts
i!te!ded t# humiliate $u'licly #r i!trude the $ri(acy #" the credit card h#lders9 "amily
mem'ers% re"erees a!d "rie!ds% ma1i! threate!i! a!d a!#!ym#us calls #r ma1i! "alse
a!d misleadi! re$rese!tati#!s)
The 'a!1s sh#uld als# e!sure t# c#m$ly &ith the uideli!es #" RBI i! res$ect #"
e!aeme!t #" rec#(ery ae!ts)
Insurance co#er to cardholders
Ba!1s/NBFCs may arra!e "#r i!sura!ce c#(er t# their credit card h#lders% #" c#urse u$#!
#'tai!i! i! &riti! the details #" !#mi!ee/s% etc) "#r settleme!t #" a!y claim i! "uture a!d the
same may 'e "#r&arded t# the i!sura!ce c#m$a!ies)
Redressal of !rie#ances
Ba!1 /NBFC sh#uld c#!stitute i! h#use .rie(a!ce Redressal machi!ery a!d e!ui!e
rie(a!ces #" credit card su'scri'ers are redressed $r#m$tly &ith#ut i!(#l(i! delay)
!enerall$% a time limit of &' (si)t$* da$s is gi#en to the customers for "referring
their com"laints / grie#ances+
Ban,/-BFC is re.uired to dis"ose off the com"laint /ithin a "eriod of 0' da$s of
lodegment of the same+ The c#m$lai!a!t ca! a$$r#ach Om'udsma! "#r redressal #" his
rie(a!ces i! case he d#es !#t recei(e satis"act#ry res$#!se &ithi! the time"rame)
Ba!1/NBFC &#uld 'e held res$#!si'le a!d lia'le t# $ay c#m$e!sati#! "#r the a!y
c#!se0ue!ces)
The !ame% desi!ati#!% address a!d c#!tact !um'er #" im$#rta!t eBecuti(es as &ell as
the .rie(a!ce Redressal O""icer #" the 'a!1/NBFC may 'e dis$layed #! the &e'site)
Internal control and monitoring s$stems
Sta!di! C#mmittee #! Cust#mer Ser(ice i! each 'a!1/NBFC is re0uired t# re(ie& #! m#!thly
'asis the credit card #$erati#!s i!cludi! re$#rts #" de"aulters a!d credit card related c#m$lai!ts
s# as t# e!sure im$r#(eme!t i! the ser(ices "#r a! #rderly r#&th i! the seme!t) Card issui!
'a!1s sh#uld ha(e i! $lace a suita'le m#!it#ri! mecha!ism t# ra!d#mly chec1 the e!ui!e!ess
#" mercha!t tra!sacti#!s als#)
Fraud Control
Ba!1s/NBFCs sh#uld set u$ i!ter!al c#!tr#l systems t# c#m'at "rauds a!d acti(ely
$artici$ate i! "raud $re(e!ti#! c#mmittees/ tas1 "#rces &hich "#rmulate la&s t# $re(e!t
"rauds a!d ta1e $r#acti(e "raud c#!tr#l a!d e!"#rceme!t measures)
?ith a (ie& t# reduci! the i!sta!ces #" misuse #" l#st/st#le! cards% it is rec#mme!ded t#
'a!1s/NBFCs that they may c#!sider issui! 5i6 cards &ith $h#t#ra$hs #" the cardh#lder
5ii6 cards &ith PIN a!d 5iii6 si!ature lami!ated cards #r a!y #ther ad(a!ced meth#ds that
may e(#l(e "r#m time t# time)
Ba!1s are als# ad(ised t# $ut i! $lace 5RBI Cir) RBI/DPSS)N#)7D87/8;)7E)88F/;88G,8H dated
Fe'ruary 7G% ;88H6 I,
Additi#!al authe!ticati#!/ (alidati#! 'ased #! i!"#rmati#! !#t (isi'le #! the cards "#r all
#!,li!e card !#t $rese!t tra!sacti#!s i!cludi! I4R tra!sacti#!s 5RBI Cir) RBI/DPSS
N#);F8F/8;)7E)88F/;88H,;878 dated A$ril ;F% ;8786
A system #" JO!li!e AlertsJ t# the cardh#lder "#r all Ccard !#t $rese!tC tra!sacti#!s #" the
(alue #" Rs)D% 888/, a!d a'#(e) 5RBI Cir) DPSS)CO)PD);;;E/8;)7E)88F/;878,77 dated
-arch ;H% ;8776
Bl#c1i! #" a l#st card immediately #! 'ei! i!"#rmed 'y the cust#mer a!d "#rmalities%
i" a!y% i!cludi! l#di! #" FIR ca! "#ll#& &ithi! a reas#!a'le $eri#d)
Right to im"ose "enalt$
RBI reser(es the riht t# im$#se a!y $e!alty #! a 'a!1/NBFC u!der the $r#(isi#!s #" the
Ba!1i! Reulati#! Act% 7HEH/the Reser(e Ba!1 #" I!dia Act% 7HFE% res$ecti(ely "#r (i#lati#! #"
a!y #" these uideli!es)
?hite Aa'el AT- 5?AA6
C#!sideri! the !early ;F,;DK year,#!,year r#&th i! the !um'er #" AT-s 5H8%888L $rese!tly6
a!d their de$l#yme!t has 'ee! $red#mi!a!tly i! Tier I / II ce!tres% a !eed t# eB$a!d the reach
#" AT-s i! Tier III t# 4I ce!tres &as "elt) Acc#rdi!ly% !#!,'a!1 e!tities i!c#r$#rated i! I!dia
u!der the C#m$a!ies Act 7HD< are $ermitted t# set u$% #&! a!d #$erate AT-s i! I!dia a"ter
#'tai!i! auth#risati#! "r#m RBI u!der the Payme!t a!d Settleme!t Systems 5PSS6 Act ;88M)
N#!,'a!1 e!tities that i!te!d setti! u$% #&!i! a!d #$erati! AT-s% &#uld 'e christe!ed
1White 2abel A3M 4"erators1 5?AAO6 a!d such AT-s &#uld 'e called 1White 2abel A3Ms1
5?AAs6) They &ill $r#(ide the 'a!1i! ser(ices t# the cust#mers #" 'a!1s i! I!dia% 'ased #! the
cards 5de'it/credit/$re$aid6 issued 'y 'a!1s) They &ill $r#(ide the 'a!1i! ser(ices t# the
cust#mers #" 'a!1s i! I!dia% 'ased #! the cards 5de'it/credit/$re$aid6 issued 'y 'a!1s)
5ligibilit$ Criteria
The -em#ra!dum #" Ass#ciati#! 5-OA6 #" the a$$lica!t e!tity must c#(er the $r#$#sed
acti(ity #" #$erati! ?AAs)
I! case #" FDI 'ei! a! a$$lica!t e!tity% !ecessary a$$r#(al "r#m c#m$ete!t auth#rity t#
'e #'tai!ed 'esides c#m$lia!ce #" reulati#!s "ramed u!der FE-A)
N#,'a!1 e!tities must ha(e !et &#rth at least Rs) 788 cr#re as $er the last audited 'ala!ce
sheet
The !et &#rth #" at least Rs) 788 cr#re has t# 'e mai!tai!ed at all times)
4ther features/sti"ulationsI
The details #" the schemes a!d !um'er #" ?TAs s#uht t# 'e i!stalled are 'r#uht #ut i!
detail i! RBI uideli!es dt) ;8)8<)7;)
The auth#risati#! issued t# a ?AAO ca!!#t 'e assi!ed/tra!s"erred &ith#ut $ri#r
a$$r#(al #" the RBI)
N# s&itch#(er #" schemes is $ermissi'le) The date "#r determi!i! the time li!e "#r
im$leme!tati#! &#uld c#mme!ce F8 days a"ter issua!ce #" the auth#risati#!)
O!ly cards issued 'y 'a!1s i! I!dia 5d#mestic cards6 &#uld 'e $ermitted t# 'e used at the
?AAs i! the i!itial stae)
Acce$ta!ce #" de$#sits at the ?AAs% 'y the ?AAO &#uld !#t 'e $ermitted
The eBta!t uideli!es #! "i(e "ree tra!sacti#!s i! a m#!th as a$$lica'le t# 'a!1 cust#mers
"#r usi! #ther 'a!1 AT-s &#uld 'e i!clusi(e #" the tra!sacti#!s e""ected at the ?AAs)
The ?AA O$erat#r &#uld !#t 'e e!titled t# a!y "ee "r#m the card issuer,'a!1 #ther tha!
the NI!tercha!e9 "ee $aya'le t# Cac0uirerC 'a!1 u!der the 'a!1 #&!ed AT- sce!ari#)
?AAs are !#t $ermitted t# chare 'a!1 cust#mer directly "#r the use #" ?AAs) They are
e!titled t# recei(e a "ee "r#m the 'a!1s "#r the use #" AT-s res#urces 'y the 'a!1s9
cust#mers
?AAO is $ermitted t# ha(e m#re tha! #!e S$#!s#r Ba!1) Cash -a!aeme!t at the
?AAs &ill 'e the res$#!si'ility #" the S$#!s#r Ba!1% etc)
The su'missi#! #" a$$licati#!s "#r auth#risati#! has 'ee! eBte!ded till Decem'er F7%
;87;)
S#urceI RBI -) Circular
#8#8#8#8#