RBI comes down on unsolicited credit cards

[B. Karthick]

Mumbai, July 24 If you receive an unsolicited credit card, you can now
make your bank pay for the inconvenience caused to you.

The bank issuing the card will not only have to pay a penalty to the
Reserve Bank of India, but also offer monetary compensation to the
customer.

The RBI on Thursday issued a circular, which lists out a series of dos
and don’ts about the protocol that will have to be maintained in the
case of credit cards.

The circular says that if an unsolicited card is issued , activated
and billed for without the consent of the customer, the card issuing
bank will not only have to reverse the charges, but also pay a penalty
amounting to twice the value of the charges reversed.

Additionally, help is also at hand from the banking ombudsman who will
determine the amount of compensation payable for the loss of the
complainant’s time, expenses incurred, harassment and the mental
anguish suffered by him.

The bank will also be held responsible if a card is misused before it
reaches the customer. “It is clarified that any loss arising out of
misuse of such unsolicited cards will be the responsibility of the
card issuing bank only,” the RBI said.

To prevent misuse, banks have been asked to consider issuing cards
with photographs of the cardholder, cards with the PIN and signature
laminated cards.

As in the case of loans, banks will also have to prescribe a ceiling
rate of interest, processing and other charges in the case of credit
card dues.

Banks, which offer accidental death and disability insurance on their
cards in tie-up with insurers have been asked to obtain in writing the
details of the nominees for these benefits.

Customers will also have to be given the option to decide whether they
want the bank to share their personal information with other agencies