Credit cards holder? Cheer up! There is great news coming your way. The Reserve Bank of India has asked banks not to charge excessive interest rates on personal loans and prescribe a ceiling rate on small advances, a move that will benefit card users across the country.
Issuing fresh guidelines for credit card operations, the RBI has also directed the banks not to reject credit card applications of customers without assigning reasons in writing.
The Reserve Bank of India had undertaken a study on the credit card operations of banks, based on the complaints it received. It has now come out with a list of recommendations.
Check out what the RBI has prescribed to end the woes of lakhs of credit card holders who have been subjected to various kinds of anomalies in terms of card issuance, usage, payment of fees, late payment and recovery of cards.
Flooded with unsolicited credit cards offers? Well, not any longer, the RBI has said that unsolicited credit cards should not be issued.
In case an unsolicited card is issued and activated without the consent of the recipient and he is billed for the same, the card issuing bank will have to reverse the charges, and pay a penalty to the recipient amounting to twice the value of the charges reversed.
The banks should independently assess the credit risk while issuing cards to persons, especially to students and others with no financial stability. Banks need to be very careful while issuing credit cards.
The Reserve Bank of India (RBI) building in Mumbai. | Photograph: Sajjad Hussain/AFP/Getty Images
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