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Credit and Debit Card Rules

RBIs New Credit Card Policies: Enhancing Transparency and Choice

In a move aimed at boosting transparency, accountability, and customer choice, the Reserve Bank of India (RBI) has introduced significant changes to credit card regulations. These reforms, effective from March 7, 2024, impact both banks and non-banking financial companies (NBFCs). Let’s delve into the specifics of these policy updates and understand their implications.

Key Highlights of RBI’s New Credit Card Policies

  1. More Card Network Choices: Card issuers now offer customers the option to choose from multiple card networks, enhancing flexibility and customization in their credit card experience.
  2. Transparent Transaction Tracking: Regulatory emphasis on tracking credit card transactions ensures transparency and accountability, enabling informed financial decisions.
  3. Revised Credit Limit Assessment: Card issuers assess credit limits based on financial circumstances, preventing excessive credit exposure and promoting responsible lending practices.
  4. Enhanced Security and Secure Card Activation: Enjoy peace of mind with zero liability protection for unauthorized transactions and enhanced security measures like OTP requirement.
  5. Clarity on Late Payment Charges and Transparency in Minimum Payment Due: Revised late payment charges and clear requirements empower informed payment decisions, ensuring transparency for cardholders.
  6. Flexible Billing Cycles: Modify billing cycles to align with financial needs and obligations, enhancing flexibility.
  7. Promotion of Responsible Credit Usage: Emphasis on responsible credit usage raises awareness and educates cardholders on financial management.

Key Benefits of RBI’s New Credit Card Rules:

  • Customer Choice and Flexibility:
    Cardholders now have the freedom to choose from multiple card networks, empowering them to select networks that offer better rewards and benefits.
  • Transparency and Protection:
    Enhanced transparency in credit card transactions promotes responsible usage, while zero-liability protection safeguards cardholders against unauthorized transactions.
  • Financial Fairness:
    Revised late payment charges and monitoring of business expenses promote responsible credit usage and fairness in financial management.
  • Data Protection and Compliance:
    Emphasis on customer confidentiality and compliance with regulatory guidelines ensures the protection of customer data and transparent recovery processes.

Understanding Different Scenarios and Their Impact on Billing

Scenario 1: Credit of Refund/Failed/Reversed Transaction within the Same Billing Cycle

Suppose you made a purchase of ₹5,000 on your credit card on April 5th.

However, due to some issue, the transaction failed, and you were not charged.

Later, on April 10th, the merchant processes a refund for the failed transaction, crediting ₹5,000 back to your credit card account.

Now, when your credit card bill is generated on April 15th, it will consider this refund. The total amount due will be calculated after adjusting the refund against other debits (if any) during that billing cycle.

Scenario 2: Refund of Failed or Cancelled Transactions After the Generation of the Bill but Before Payment of the Dues

Imagine you made a purchase of ₹10,000 on your credit card on March 20th.

The credit card bill for March was generated on March 25th, including the ₹10,000 charge.

However, on March 28th, you decided to return the item, and the merchant processed a refund of ₹10,000.

When you receive the bill, it will show a total amount due of ₹0 because the refund offsets the original charge.

Scenario 3: Credit of Refund/Failed/Reversed Transaction for Which Payment Has Already Been Made

Suppose you paid your credit card bill of ₹25,000 on May 1st.

On May 5th, you realize that a recent transaction of ₹2,500 was incorrect, and you request a refund.

The card issuer processes the refund on May 10th, crediting ₹2,500 back to your credit card account.

Since you’ve already paid the dues, the card issuer will seek your consent to adjust the refund amount.

If you agree, they’ll deduct ₹2,500 from your outstanding balance. If not, the refund will be credited back to your bank account.

Scenario 4. Credit Card Portability and Network Choice:

Key Points:

Credit card issuers must now allow customers to choose from a range of card networks during the issuance process.

Exclusive partnerships with a single card network for credit card issuance are prohibited.


Suppose you apply for a new credit card. Instead of being limited to a specific card network, you now have the flexibility to choose from multiple networks (such as Visa, MasterCard, or RuPay) based on your preferences and needs.

Scenario 5. Enhanced Rules for Existing Cardholders:

Key Points:

At the time of card renewal, cardholders will be given the option to select their preferred card network.

This ensures that even existing cardholders can benefit from the flexibility to choose the network that aligns with their lifestyle and usage patterns.


If you currently hold a credit card, when it’s time for renewal, you’ll receive communication from your bank or issuer asking you to select your preferred card network (e.g., Visa, MasterCard, or RuPay).

In conclusion, the RBI’s recent initiatives are geared towards making credit cards simpler and fairer for consumers. These changes offer more options to users and encourage responsible financial behavior. It’s essential to stay informed about further updates from RBI.