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RBI restrains banks from issuing unsolicited credit cards
By
IANS
Mumbai: The Reserve Bank of India (RBI) has instructed all commercial banks to refrain from issuing unsolicited credit cards and activating them without seeking the customer's consent.
In a notification issued here Thursday, the RBI has made it very clear to banks that those who issue unsolicited credit cards, activate them and subsequently bill them will not only "have to reverse the charges forthwith, but will also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed."
The notification also empowers the person in whose name the card is issued to approach the banking ombudsman "who would determine the amount of compensation payable by the bank to the recipient of the unsolicited credit card as per the provisions of the Banking Ombudsman Scheme, 2006, i.e for loss of complainant's time, expenses incurred, harassment and mental anguish suffered by him."
In instances where unsolicited credit cards issued have been misused before reaching the person in whose name the card was issued, the central bank has made it clear that the card issuing bank will be held responsible for any loss arising out of misuse of such cards.
On the issue of insurance cover offered to credit card holders through tie-ups with insurance companies, the banks will henceforth have to obtain in writing from the credit card holder the details of the nominee for the insurance cover with regard to accidental death and disablement benefits, the notification said.
The banks will also have to ensure that the relevant nomination details are recorded by the insurance company and issue a letter to the credit card holder indicating the details regarding the name, address and telephone number of the insurance company which will handle the claims relating to the insurance cover.
In a notification issued here Thursday, the RBI has made it very clear to banks that those who issue unsolicited credit cards, activate them and subsequently bill them will not only "have to reverse the charges forthwith, but will also pay a penalty without demur to the recipient amounting to twice the value of the charges reversed."
The notification also empowers the person in whose name the card is issued to approach the banking ombudsman "who would determine the amount of compensation payable by the bank to the recipient of the unsolicited credit card as per the provisions of the Banking Ombudsman Scheme, 2006, i.e for loss of complainant's time, expenses incurred, harassment and mental anguish suffered by him."
In instances where unsolicited credit cards issued have been misused before reaching the person in whose name the card was issued, the central bank has made it clear that the card issuing bank will be held responsible for any loss arising out of misuse of such cards.
On the issue of insurance cover offered to credit card holders through tie-ups with insurance companies, the banks will henceforth have to obtain in writing from the credit card holder the details of the nominee for the insurance cover with regard to accidental death and disablement benefits, the notification said.
The banks will also have to ensure that the relevant nomination details are recorded by the insurance company and issue a letter to the credit card holder indicating the details regarding the name, address and telephone number of the insurance company which will handle the claims relating to the insurance cover.
Reader's comments(2)
1
RBI is catchin/doing only a tip of iceberg. RBI framed rules under the Credit
Information Companies Act for what purpose? For whose protection ? The Act
itself is curse to the society. The RBI is made administrative agency of the
Act. The Act is made not to protect the interest of the good and gentle
customers but to equip the rogue banks, especially some foreign and the
so-called new generation banks to do any misuse or abuse of banking. All banks
are allowed to make reports on their customers behind them to Credit Information
Company without making safeguards against making false and untrue reports. To
protect the interests of the gentle customers all banks and credit information
company should be required to give a prior notice to the customer, especially in
case of adverse reports, before making a credit report on a customer and a copy
of the report when makes a report. Without it how a customer will know what
transacts behind him. Who knows better than a customer whether a credit report
on him is correct or false or a manipulated one ? And now the RBI does what ?
Information Companies Act for what purpose? For whose protection ? The Act
itself is curse to the society. The RBI is made administrative agency of the
Act. The Act is made not to protect the interest of the good and gentle
customers but to equip the rogue banks, especially some foreign and the
so-called new generation banks to do any misuse or abuse of banking. All banks
are allowed to make reports on their customers behind them to Credit Information
Company without making safeguards against making false and untrue reports. To
protect the interests of the gentle customers all banks and credit information
company should be required to give a prior notice to the customer, especially in
case of adverse reports, before making a credit report on a customer and a copy
of the report when makes a report. Without it how a customer will know what
transacts behind him. Who knows better than a customer whether a credit report
on him is correct or false or a manipulated one ? And now the RBI does what ?
Posted by:
P V Thomas
2
This is a very good initiative moved by Apex Bank. This will benifit the
consumers. Many times Credit Card issuing banks harrass the customer with no
reason to do so.
consumers. Many times Credit Card issuing banks harrass the customer with no
reason to do so.
Posted by:
Anand
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