Business
RBI Issues New Credit Card Guidelines to Ban Hidden Charges Without Customer Consent
The Reserve Bank of India has mandated banks to prohibit hidden charges on credit cards unless customers give explicit consent, aiming to enhance consumer protection.
The Reserve Bank of India (RBI) has issued new guidelines for banks to curb the practice of levying hidden charges on credit card accounts. The directive, aimed at safeguarding customer interests, explicitly states that banks cannot impose any undisclosed fees without obtaining the cardholder’s prior consent.
Under the new rules, banks must disclose all potential charges in a clear and transparent manner at the time of credit card issuance and during subsequent account updates. Any fee that is not explicitly communicated and agreed upon by the customer is prohibited. The RBI’s move follows growing concerns over opaque billing practices and seeks to align credit card operations with global best practices in consumer protection.
The guidelines are expected to prompt banks to review and revise their fee structures, ensuring that all charges are fully disclosed in the terms and conditions and in periodic statements. Consumers will benefit from greater transparency and the ability to make informed decisions about their credit card usage. Banks that fail to comply may face regulatory scrutiny and potential penalties.
Under the new rules, banks must disclose all potential charges in a clear and transparent manner at the time of credit card issuance and during subsequent account updates. Any fee that is not explicitly communicated and agreed upon by the customer is prohibited. The RBI’s move follows growing concerns over opaque billing practices and seeks to align credit card operations with global best practices in consumer protection.
The guidelines are expected to prompt banks to review and revise their fee structures, ensuring that all charges are fully disclosed in the terms and conditions and in periodic statements. Consumers will benefit from greater transparency and the ability to make informed decisions about their credit card usage. Banks that fail to comply may face regulatory scrutiny and potential penalties.