Personal Finance

A — Unsolicited Cards (Strictly Prohibited)

• ▸Issue or upgrade of credit cards without the explicit consent of the recipient is strictly prohibited.
• ▸If an unsolicited card is issued/activated and billed, the card issuer must reverse all charges and pay a penalty equal to twice the charges levied.
• ▸Card issuer must have a Board-approved policy hosted on its website.

B — Sanction & Issuance Norms

• ▸Direct Selling Agents (DSAs) must not make the final credit decision — the card issuer is solely responsible.
• ▸Banks must assess the total credit limit across all cards held by a customer.
• ▸Banks/NBFCs are solely responsible for KYC compliance.
• ▸Most Important Terms and Conditions (MITCs) — standardised by RBI — must be given at marketing stage, application, card issuance (welcome kit), and in all important subsequent communications.
• ▸EMI conversion to 'zero-cost EMI' must not camouflage an interest component. EMI with interest shall not be presented as no-cost EMI.
• ▸Credit information shall not be reported to Credit Information Companies (CICs) before the card is activated.

C — Insurance Offers

• ▸Insurance cover (for lost cards, frauds, etc.) may be offered at the customer's option — not mandatory.
• ▸Explicit written/digital consent of the cardholder is required, along with nominee details.
• ▸Cardholder must be given contact details of the insurance company.

D — Types of Credit Cards

• ▸Co-branded cards — due diligence on the non-bank partner is mandatory to guard against reputation risk.
• ▸Corporate credit cards — account in company's name, used by employees; liabilities of both clearly specified.
• ▸Add-on cards — issued to family members of principal cardholder; principal cardholder is liable.

E — Issuance Rules

• ▸All new and replacement cards must be EMV Chip and PIN enabled.
• ▸If credit limit is proposed to be reduced, the bank must inform the customer immediately with reasons (via SMS/e-mail, followed by written confirmation).
• ▸Cancellation must be confirmed within 7 working days of a valid written/e-mail request, provided the outstanding is settled.

F — Credit Card Statements

• ▸Monthly statement — free of cost — must be dispatched on a predetermined date by post/courier or e-mail, and also available on internet banking.
• ▸Before reporting a default to CICs, banks must follow a Board-approved procedure that includes sufficient notice to the cardholder.

G — Interest Rates & APR

• ▸Card issuers must quote Annualised Percentage Rate (APR) separately for retail purchases and cash advances.
• ▸Late payment charges, their method of calculation, and applicable number of days must be prominently displayed.
• ▸Bills must be dispatched with sufficient time — at least one fortnight — before interest starts accruing.
• ▸Monthly statements must prominently display: 'Making only the minimum payment every month would result in the repayment stretching over years with consequent interest payment on your outstanding balance.'
• ▸No charge may be levied that was not explicitly indicated at the time of issuing the card.

H — Wrongful Billing

• ▸Banks must ensure wrong bills are not raised.
• ▸If a customer protests a bill, the bank must provide explanation and/or documentary evidence within 30 days of the complaint.

I — Grievance Redressal

• ▸Card issuer must constitute a Grievance Redressal Machinery and publicise it widely.
• ▸Grievance Redressal Officer's name and contact number must be printed on the credit card bill.
• ▸If not resolved within 30 days, the complainant may approach the Banking Ombudsman.
• ▸For card-not-present (CNP) fraudulent transactions where 2FA was not in force, the bank must reimburse the customer without demur.

J — Fraud Control & Tokenisation

• ▸Lost card must be blocked immediately on being informed — FIR formalities can follow within a reasonable period.
• ▸SMS/e-mail alerts must be sent for every transaction.
• ▸Two-Factor Authentication (2FA) is mandated by RBI for all card-not-present (CNP) transactions.
• ▸Tokenisation — the actual card details are replaced by an alternate code called a 'token', unique for each card–device–requestor combination. Tokenised transactions are safer because actual card details are not shared with the merchant.

I — Acquisition of Land

Finance for purchase of a plot is permitted provided the borrower submits a declaration of intent to construct a house on the plot (using bank finance or otherwise) within a specified period.

II — Construction / Ready-Built House

Finance for purchase/construction of dwelling unit; a second house in the same or another town; a house proposed to be let out on rental basis; an old house being occupied by the borrower as a tenant; and construction to improve slum-area conditions (directly to slum-dwellers on Government guarantee, or through State Governments).

III — Lending to Housing Intermediary Agencies

Term loans to State-level housing boards, public agencies, and housing finance companies for acquisition/development of land and construction projects. The project must be completed within 3 years. Banks may also lend to private builders — linked to specific projects on commercial terms — but not for land acquisition by builders.

Prohibited Purposes

Banks must NOT finance: (a) buildings purely for Government/Semi-Government/Panchayat offices (except where NABARD refinances); (b) public sector entities that are not corporate bodies; (c) any project where bank finance substitutes budgetary resources without a commercial mandate.