Banks must honor requests to close a credit card, immediately notifying the customer of the closure via email, SMS, etc. Customers should have multiple channels such as helpline, dedicated email id, interactive voice response (IVR), visible link on website, online banking, mobile app or any other mode to close their charts and cannot insist on any channel. “Failure on the part of the card issuers to complete the closing process within seven working days will result in a penalty of Rs 500 per day of delay payable to the customer, until the account is closed provided there is no has no outstanding balance in the account,” the RBI said.
The provisions relating to credit cards under the RBI (Credit Card and Debit Card – Issuance and Conduct) Guidelines, 2022 apply to each scheduled bank (excluding payment banks, state co-operative banks and District Central Co-operative Banks) and all Non-Banking Financial Corporations (NBFCs) operating in India. The new guidelines will be effective from July 1, 2022.
Here is an overview of the rules for closing credit cards.
Closing of the credit card within seven days
According to senior management, the credit card issuer must honor any request to close a credit card within seven business days, subject to the cardholder paying all dues.
Immediate notification of account closure
Immediately after a credit card is closed, the cardholder will be notified of the closure by e-mail, SMS or any other means.
Closing credit card accounts through multiple channels
Now cardholders can request closure of their credit card account using a variety of channels, including a help line, a dedicated email address, an interactive voice response (IVR), a clear link visible on the website, internet banking, mobile banking or any other means.
Note that if a bank or NBFC fails to close an account within seven working days, a penalty of SR500 per day of delay will be charged until the account is closed, assuming there is no no funds in circulation.
According to senior management, “The card issuer should not insist on sending a close request by mail or any other means that may cause a delay in receiving the request. Failure by card issuers to complete the closing process within seven business days will result in a penalty of 500? per day of delay payable to the customer, until the account is closed, provided that there is no outstanding amount on the account. ”
Banks can close the credit card if it is not used for more than a year
If a credit card has not been used for more than a year, the card holder will be informed and the procedure for canceling the card will be initiated. If the Cardholder does not respond within 30 days, the Card Account will be terminated by the Card Issuer, subject to payment by the Cardholder of any fees.
Within 30 days, the card account closure information must be updated with the Credit Information Company.
Credit balance that can be transferred to the cardholder’s bank account
If there is any amount of credit left on cardholders’ accounts after the account is closed, it will be transferred to the cardholder’s bank account. If cardholder bank account information is not available, card issuers must obtain it.