Monday, April 28, 2008

Be aware of RBI rules made for credit card companies

The Reserve Bank of India (RBI) has made rules for credit card companies operating in India but people of India are not aware of these official rules. There have been instances where people owing credit cards are being have often suffered at the hands of the card issuing banks.
Gita purchased an airline ticket by using her credit card online. A month later, she received billing statement on seeing the details she was shocked to see her statement included a charge for clothes worth Rs 2,000. As she had not bought the clothes, she thought that the credit card company might have made a mistake. On carrying out the investigations it was discovered that a hacker had gained access to her credit card number online and made the purchase. She is not the only one to experience this. Every year, there are several customers facing such problems and are involved in disputes with credit card companies.

In fact promotional offers by credit card companies are also creating problems for the people. For instance Sita, received a call from a credit card company that said she will be able to get cosmetics worth upto Rs 2,000 free in the first month if she signed up for the credit card. But when she received her billing statement she was shocked to see the charges for cosmetics worth Rs 500 which she had purchase from her local store.

Innumerable customers such as Sita and Gita often suffer in silence because of their unawareness about the rules formulated for credit card companies.

Basically the Reserve Bank of India (RBI) master circular of rules were planned for Indian credit card companies which has information for credit card users in India which they should keep in mind while using their cards:

1) Each credit card issuing institution is required to incorporate the RBI's rules in its fair practices code and release that information to everybody, including customers

2) The card issuing companies must inform the customers about the terms and conditions for issue and usage of a credit card. The customers should also ask for such information in printed form (leaflets, booklets)

3) All the information related to annualized percentage rate (APR), the minimum amount due, and the date within which payment has to be made (at least a fortnight must be allowed) should be provided to the customers clearly.

4) Banks should take care that wrong bills are not issued to the customers. In case of any dispute the bank should be ready to give documentary evidence within 60 days

5) Customers' rights must be protected by the credit card company. The right to privacy is among these rights. Customers should not be issued unwanted cards. The permission from the customer should be taken in case of change in the terms and conditions and also must be informed about the changes also. If customers want their telephone number included in a Do Not Call Registry, the credit card company should honor the request

6) The bank should ensure the confidentiality of customer information even if its operations are being outsourced. The bank must take consent from customer's consent before releasing any details related to customer.

7) The customer must be informed if he/she is being reported to the Credit Information Bureau of India Ltd or any other credit information company approved by RBI for defaulting on payments

8) Threats or harassment of any kind in debt collection is prohibited

9) Every credit card company is required to have a grievance redressal officer to address complaints made by customers. In case a complaint is not addressed within 30 days, a customer can take his/her complaint to the Banking Ombudsman

10) The RBI has the right to penalize a credit card company for violating its rules.

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