Did it ever happen that you sent a request to the bank to cancel your credit card, and they did not oblige with your request? Or are they forcing you not to cancel your credit card? Or not even trying to contact you? Whatever the reason is, they are still not canceling your credit card. 7 Working Days Credit Card Cancellation Rule RBI has given clear instructions that if a bank does not cancel a person’s credit card within seven working days, it must pay a fine of ₹500 daily. The bank or credit card issuing company must pay the penalty until it obliges the cardholder and cancels their card. This direction given by the RBI needs to be followed by all non-banking financial companies and all banks, excluding payments banks, state co-operative banks, and district central co-operative banks. Keep reading to learn about the guidelines issued by the RBI.

Guidelines for Closing Credit Cards by RBI

  • The credit card issuer will honor any request to close a credit card within seven working days, subject to the cardholder’s payment of all dues.
  • After the credit card is closed, the cardholder will be immediately notified by email, SMS, etc.
  • Cardholders shall be provided with the option to submit a request for closure of their credit card account through multiple channels, such as a helpline, dedicated email ID, Interactive Voice Response (IVR), prominently visible link on the website, internet banking, mobile app, or any other mode.
  • The card issuer shall not insist on sending a closure request through post or any other means that may delay its receipt.
  • Failure on the part of the card issuers to complete the closure process within seven working days shall result in a penalty of ₹500 per calendar day of delay payable to the cardholder until the closure of the account, provided there is no outstanding in the account.
  • The information regarding the card account closure shall be updated with the Credit Information Companies within 30 days.
  • After closing the credit card account, any remaining credit balance will be transferred to the cardholder’s bank account.
  • Card issuers shall obtain the cardholder’s bank account details if unavailable.

Important Factors to Remember

Credit Cards to be Closed Within Seven Days

When you don’t need your credit card, you can ask the issuing authority to close it. The credit card issuer must close a credit card within seven business days of receiving a request from the cardholder, as long as the cardholder has paid all outstanding balances.

Closing Credit Cards through Multiple Channels

When closing a credit card account, cardholders have multiple convenient options available. This flexibility allows individuals to choose the best method for their preferences or circumstances. Cardholders can request the closure of their credit card account through various channels, including a helpline, dedicated email address, Interactive Voice Response (IVR), a visible link on the website, internet banking, mobile banking, or any other means.

Banks Will be Fined for Ignoring Customer Requests

If a bank or NBFC does not close an account within seven working days, a penalty of ₹500 per day of delay will be charged until the account is closed, assuming no outstanding funds. This rule has been directed by the RBI to all banks and NBFCs.

Bank Can Cancel Unused Credit Cards After a Year

If a credit card has not been used for more than a year, the bank will notify the cardholder, and the procedure to terminate the card will be initiated. If the cardholder does not respond within 30 days, the card issuer will cancel the card account, subject to the cardholder’s payment of any dues. Within 30 days, the information on the card account closure must be updated with the Credit Information Company.

Bottom Line

RBI’s 7-working-day credit card cancellation rule is a significant step toward consumer protection. It ensures that banks and credit card issuers act promptly when a cardholder wishes to close their account. According to this rule, once a cardholder requests the closure of their credit card and has settled any outstanding balances, the issuer is obligated to close the account within seven working days. If the bank fails to stick to this timeline, they face a penalty of ₹500 for each day of delay, payable to the cardholder. This rule stops banks from delaying or ignoring customer requests to cancel, giving a clear, penalty-supported reason to act quickly.

This rule offers flexibility and convenience for cardholders, allowing them to initiate the closure through various channels making it easier than ever to manage their financial products. Banks must update Credit Information Companies about account closures within 30 days. This helps protect the cardholder’s credit score. Overall, this rule empowers consumers, ensuring their requests are taken seriously and handled efficiently, without unnecessary delays or obstacles.

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