Relief in some provisions related to credit and debit card activation, RBI extended the deadline of 3 months
The Reserve Bank has amended the provisions relating to activation of co-branding cards including credit and debit cards. has been eased. The central bank has approved the extension of three provisions for a period of 3 months beyond June 30, 2022. reserve Bank of IndiaAccording to a statement issued by the RBI, the deadline for implementing certain provisions of Master Direction on the card is being extended to October 2022 following requests from certain parties involved in the industry. These 3 provisions include provisions related to OTP based consent, non-payment of fee for activation of credit lines and credit cards, RBI has not given any relief to fintech companies. However, the Reserve Bank has not given any relief to fintech companies. The IBA, on the other hand, sought six months’ time to implement the changes. But the Reserve Bank has given 3 months time in only 3 provisions.
Fintech companies haven’t got relief
Following the request of the industry, the Reserve Bank has extended the time limit for some provisions. However, there is no relief on the provisions affecting the business of fintech companies. Under the Master Direction, certain provisions have laid down limits on companies engaged in the marketing and distribution of credit and prepaid cards under cross-branding. This is likely to impact the fintech’s card issuance business like OneCard, PayU. As per the changes, the co-branding partner will not be able to access information about transactions done through the card. According to Money Control News, this rule could affect the way fintech companies do business and fintech companies are planning to change their business models with partner banks such as RBL and Federal Bank.
What is the relief of Reserve Bank
The Reserve Bank has extended the time limit on these three provisions. As per the first provision, the card issuing bank will be required to ask for a one time password to activate the card as per the master instruction in that case. When the card has not been activated by the customer himself within 30 days from the date of issue. In case one time password based approval is not received from the customer, the card issuer will have to close the credit card account within 7 days and will not be able to charge the customer for the same. That is, banks and NBFCs will not be able to activate the card at their sole discretion without the consent of the customer.