Reserve Bank of India has issued a Master Circular on Credit Card operations w.e.f. 1st July, 2010. This circular covers various issues regarding operations of Credit Cards like as adoption of Fair Practice Code, Interest rates and other charges on protection of customers against wrongful blling, liabilities and responsibilities of bank etc. Complete circular in detail is given as under :-
In order to ensure that Banks/ Non-Banking Financial Companies (NBFCs) run their credit card operations in a fair and regulated manner, Reserve Bank of India (RBI) had issued Master Circular on Credit Card operations on 1st July, 2010. These guidelines cover various issues concerning credit card operations like adoption of Fair Practice Code, interest rates and other charges on protection of customers against wrongful billing, liabilities and responsibilities of the banks etc..
In terms of RBI circular dated 9th July, 2010, banks have been advised to strictly adhere to the guidelines contained in the Master Circular on credit card operations both in letter and sprit, failing which RBI shall be constrained to initiate suitable penal action, including levy of monetary penalties, under the relevant statutory provisions.
Service charges are decided by individual banks on their own, havingregard to cost of rendering various services and as such there is no uniformity in the service charges for credit cards and issuance of demand drafts by different banks. Since the RBI has not fixed rates to be charged on their services and banks are free to determine interest rates and service charges, there is no violation of RBI guidelines/ directives by banks. Under the Banking Ombudsman Scheme, 2006 as amended in February, 2009, Banking Ombudsman can award compensation upto Rs. 1.00 lakh in case of complaints arising out of credit card operations by banks, taking into account the loss of time, expenses incurred, harassment and mental anguish suffered by the complainant.
This information was given by the Minister of State for Finance, ShriNamo Narain Meena in a written reply to an Unstarred Question raised inRajya Sabha today.