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Credit Cards and Debit Cards

Reserve Bank of India (RBI) has issued directions on issuance of credit cards and debit cards.

To whom are the directions applicable?

The directions are applicable to the following Regulated Entities (REs) –

  • Commercial Banks 
  • Small Finance Banks (SFBs)
  • Regional Rural Banks (RRBs)
  • Primary (Urban) Co-operative Banks (UCBs)
  • Non-Banking Financial Companies (NBFCs) for all layers –
    • NBFC-Investment and Credit Companies (NBFC-ICC)
    • NBFC-Factor 
    • NBFC-Micro Finance Institutions (NBFC-MFI) 
    • Housing Finance Company (HFC) 

What is a credit card?

Credit Card is a physical / virtual payment instrument issued with a pre-approved revolving credit limit that can be used to purchase goods and services or draw cash advances.

What is a debit card?

Debit Card is a physical / virtual payment instrument linked to a Savings Bank / Current Account which can be used to withdraw cash, make online payments, do Point of Sale (PoS) terminal / Quick Response (QR) code transactions, fund transfer, etc.

Which REs are eligible to issue credit cards?

  • Commercial Banks and SFBs with net-worth of ₹100 crore and above are permitted to undertake credit card business either independently or in tie-up arrangement with other card issuing banks / NBFCs. 
  • Commercial Banks desirous of setting up separate subsidiaries for undertaking credit card business shall require prior approval of the RBI.
  • RRBs are permitted to issue credit cards in collaboration with their sponsor bank or other banks.
  • Financially sound and well managed Scheduled UCBs with minimum net-worth of ₹100 crore which are Core Banking Solution (CBS) enabled may issue credit cards subject to the additional conditions prescribed by the RBI.
  • NBFCs shall not issue credit cards, charge cards, or similar products virtually / physically without obtaining prior approval from the RBI and shall have minimum net owned fund of ₹100 crore.

What are the directions on issuance of credit cards?

  • Card-issuers shall seek One Time Password (OTP) based consent from the cardholder for activating a credit card, if the same has not been activated by the customer for more than 30 days from the date of issuance. If no consent is received for activating the card, card-issuers shall close the credit card account without any cost to the customer within 7 working days from date of seeking confirmation from the customer. In case of a renewed or replaced card, the closure of an inactivated card shall be subject to payment of all dues by the cardholder.
  • Customer-initiated process indicating intent to use a credit card such as PIN generation, modification of transaction control, Interactive Voice Response, recorded call to the customer care centre and SMS may be considered as activation of credit card.
  • Card-issuers shall ensure that the credit limit as sanctioned and advised to the cardholder is not breached at any point in time without seeking explicit consent from the cardholder.
  • Any request for closure of a credit card shall be honoured within 7 working days by the credit card-issuer, subject to payment of all dues by the cardholder. Failure on the part of the card-issuers to complete the closure process within 7 working days shall result in a penalty of ₹500 per calendar day of delay payable to the cardholder, till the closure of the account provided there is no outstanding in the account.
  • In case payment towards dues is outstanding, the card-issuer shall provide details regarding such outstanding dues to the cardholder upon receipt of the closure request without waiting for completion of the billing cycle and accordingly advise him / her to make payment in order to complete the closure process. In such cases, the prescribed timeline of 7 working days shall be calculated after excluding the number of days taken by the cardholder to clear the outstanding dues. 
  • If a credit card has not been used for more than 1 year, the process to close the card shall be initiated after intimating the cardholder. If no reply is received from the cardholder within 30 days, the card account shall be closed by the card-issuer, subject to payment of all dues by the cardholder. 
  • In addition to financial transactions, any process initiated by the cardholder such as generation of statement, change of PIN, change in transaction controls, etc., shall be considered for treating a card as ‘used’. However, any calls made to the customer care centre, for reasons other than those cited above, shall not be considered towards usage of a card.
  • Subsequent to closure of credit card account, any credit balance available in credit card accounts shall be transferred to the cardholder’s bank account.
  • In case a cardholder makes partial payment or does not clear the total amount due within the payment due date, interest free credit period will be lost, and interest may be levied from the date of transaction on the outstanding amount (adjusted for payments / refunds / reversed transactions as and when credited) and not on the total amount due. Further, late payment fee and other charges relating to delay in payment shall be levied only on the outstanding amount (adjusted for payments / refunds / reversed transactions as and when credited) after the payment due date and not on the total amount due.
  • Card-issuers shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz. late payment charges and other related charges, if any, only when a credit card account remains ‘past due’ for more than 3 days. The number of ‘days past due’ and late payment charges shall be computed from the payment due date mentioned in the credit card statement. 
  • Before reporting default status of a credit cardholder to a CIC, the card-issuers shall intimate the cardholder. In the event the cardholder settles his / her dues after having been reported as defaulter, the card-issuer shall update the status with CIC within 30 days from the date of settlement.
  • Changes in charges shall be made only with prospective effect giving prior notice of at least 1 month. If a cardholder desires to surrender his / her card on account of any change in charges to his / her disadvantage, he / she shall be permitted to do so without levying any extra charge for such closure, subject to payment of all dues by the cardholder.
  • In case, a cardholder protests any bill, the card-issuer shall provide explanation and, wherever applicable, documentary evidence to the cardholder within 30 days from the date of complaint.
  • Cardholders shall be provided option to modify the billing cycle of the credit card at least once.
  • Card-issuers shall seek explicit consent of the cardholder to adjust credit amount beyond a cut-off, 1% of the credit limit or ₹5000, whichever is lower, arising out of refund / failed / reversed transactions or similar transactions against the credit limit for which payment has already been made by the cardholder. The consent shall be obtained through e-mail or SMS within 7 days of the credit transaction. The card-issuers shall reverse the credit transaction to the cardholder’s bank account, if no consent / response is received from the cardholder. Notwithstanding the cut-off, if a cardholder makes a request to the card-issuer for reversal of the credit amount outstanding in the card account into his / her bank account, the card-issuer shall do it within 3 working days from the receipt of such request.

What are the directions on unsolicited credit cards?

  • Unsolicited Credit Card is a credit card issued without a specific written / digital request or an application therefor.
  • In case a customer receives an unsolicited card, he / she should refrain from activating or providing consent for activation of card through OTP or any other means. If no consent is received for activating the card, the card-issuer shall close the credit card account without any cost to the customer within 7 working days from the date of seeking confirmation from the customer.
  • In case, an unsolicited card is issued / existing card upgraded and activated without the explicit consent of the recipient and the latter is billed for the same, the card-issuer shall not only reverse the charges forthwith, but also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed. In addition, the person in whose name the card is issued can also approach the RBI Ombudsman who would determine the amount of compensation payable by the card-issuer to the recipient of the unsolicited card as per the provisions of the Ombudsman Scheme, i.e., for loss of complainant’s time, expenses incurred, harassment and mental anguish suffered by him / her.
  • Any loss arising out of misuse of unsolicited cards shall be the responsibility of the card-issuer only.

Which REs are eligible to issue debit cards?

  • Prior approval of the RBI is not necessary for banks desirous of issuing debit cards to their customers. NBFCs are not permitted to issue debit cards.
  • Debit cards shall only be issued to customers having Savings Bank / Current Accounts.
  • The bank shall not issue debit cards to cash credit / loan accounts. However, it will not preclude the banks from linking the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana accounts or Kisan Credit Card accounts with a debit card.
  • Banks shall not force a customer to avail debit card facility and shall not link issuance of debit card to availment of any other facility from the bank.

What are the directions on issuance of form factor?

  • Card-issuers may issue other form factors in place of / in addition to a plastic debit / credit card such as wearables, after obtaining explicit consent from the customer.
  • Card-issuers shall provide options for disabling or blocking the form factor.

What are the directions on issuance of co-branded cards?

  • Prior approval of the RBI is not necessary for the issuance of co-branded debit cards, co-branded prepaid cards and co-branded credit cards.
  • A card-issuer can partner with more than one co-branding partner for a card.
  • UCBs shall not issue co-branded debit cards / credit cards in tie-up with other non-bank entities.
  • The co-branded card shall explicitly indicate that the card has been issued under a cobranding arrangement. 
  • The co-branded card shall prominently bear the branding of the card-issuer.

What are other directions?

  • In case of renewal of an existing card, the cardholder shall be provided an option to decline the same if he / she wants to do so before dispatching the renewed card. Further, in case a card is blocked at the request of the cardholder, replacement card in lieu of the blocked card shall be issued with the explicit consent of the cardholder.
  • The name, direct contact number, email-id and postal address of the designated grievance redressal officer of the card-issuer shall be mentioned on the credit card bills and account statements. 
  • For redressal of his / her grievance, the customer must first approach the concerned card-issuer. If the card-issuer does not respond within 30 days after filing of the complaint or rejects the complaint wholly / partly or if the customer is not satisfied with the response / resolution given by the card-issuer, the customer can lodge his / her complaint with the RBI Ombudsman. Card-issuers shall be liable to compensate the complainant for the loss of his / her time, expenses, financial loss as well as for the harassment and mental anguish suffered by him / her for the fault of the card-issuer and where the grievance has not been redressed in time.


References

Reserve Bank of India. (2025, November 28). 'Reserve Bank of India (Commercial Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13155&Mode=0

Reserve Bank of India. (2025, November 28). 'Reserve Bank of India (Non-Banking Financial Companies – Credit Cards: Issuance and Conduct) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12956&Mode=0

Reserve Bank of India. (2025, November 28). 'Reserve Bank of India (Regional Rural Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13052&Mode=0

Reserve Bank of India. (2025, November 28). 'Reserve Bank of India (Small Finance Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13123&Mode=0

Reserve Bank of India. (2025, November 28). 'Reserve Bank of India (Urban Co-operative Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13027&Mode=0

Reserve Bank of India. (2026, April 27). 'Reserve Bank of India (Commercial Banks – Credit Cards and Debit Cards: Issuance and Conduct) - Amendment Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13388&Mode=0


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