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The Reserve Bank of India (RBI) announced new criteria for issuing credit and debit cards in April 2022. The RBI's card-on-file (CoF) tokenization regulations will take effect on October 1, 2022, changing the regulations for debit and credit card online payments. The new regulations should enhance cardholders' ability to make payments.
 
Tokenization guidelines had a July 1 deadline, but that date was moved up three months to September 30. Large merchants for the most part have already complied with the RBI's CoF tokenization requirements.
 
Here are the three new rules of credit card:
 
1. Card-issuers to seek One Time Password (OTP) :
If a cardholder has not activated their card for more than 30 days following the date of issuance, the credit card issuer must first obtain One Time Password (OTP)-based consent. The card issuer is



required to cancel the credit card account without initiating a charge within seven working days if the customer rejects the request to activate the card.
 
2. Credit-limit approval:
The credit limit that has been approved and communicated to the cardholder must never be exceeded without the cardholder's express consent, according to credit card issuers. The credit limit cannot be raised by card issuers after October 1, 2022, without the cardholder's written permission.
 
3. Rates of Interest:
In order to prevent negative amortisation, the terms and conditions for payment of credit card balances, including the minimum amount due, must be specified. The Annex includes an illustration. According to the RBI's master circular, unpaid levies, taxes, and other fees "shall not be capitalised for the purpose of charging or compounding interest."

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