Thursday, July 25, 2024
HomePoliticsRBI Asks Credit Card Issuers to Monitor End Use of Funds

RBI Asks Credit Card Issuers to Monitor End Use of Funds

In the amended Master Direction on Credit Card and Debit Cards, the central bank said that card-issuers may issue business credit cards to business entities/individuals for business expenses. The business credit cards may also be issued as charge cards, corporate credit cards or by linking a credit facility such as overdraft/cash credit provided for business purpose as per the terms and conditions
stipulated for the facility concerned. “The card-issuers shall put in place an effective mechanism to monitor end use of funds.”

The total amount due on a card would be the total amount (net of credit received during the billing cycle, if any) payable by the cardholder as per the credit card statement generated at the end of a billing cycle. Interest should be levied only on the outstanding
amount, adjusted for payments/refunds/reversed transactions stated the new rules which come into effect immediately.

Further, the central bank said for the purpose of cardholder’s convenience, card transaction related data may be drawn directly from the card issuer’s system in an encrypted form and displayed in the
co-branding partner (CBP) platform with robust security. Card-issuers shall not share card data (including transaction data) of the cardholders with the outsourcing partners unless sharing of such data
is essential to discharge the functions assigned to the latter.

In case of sharing of any data, explicit consent from the cardholder shall be obtained. It shall also be ensured that the storage and the ownership of card data remains with the card-issuer, the RBI said.

In case card-issuers, at their discretion, decide to
block/deactivate/suspend a debit or credit card, it shall be ensured that a standard operating procedure is followed as approved by their Board. Further, it shall also be ensured that blocking/deactivating/suspending a card or withdrawal of benefits
available on any card is immediately intimated to the cardholder along with reasons thereof through electronic means (SMS, email, etc.) and
other available modes.

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