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In this urban world we all strive to have a credit card for ourselves, which is not at all wrong. But during the course of its use we all must have faced or facing some bitter experience related to this product and to our great surprise our esteemed banks have always turned their back upon our face stating that it's as per the ‘Guide Lines'!

Have you ever thought or have you ever asked your banker to show you those Guide Lines? They play safe and cover up their mistakes or actually they are ignoring them in totality with a grace towards us that by providing us with a Credit Card they have done a great job just like God has created us!

Now, please allow me to open up the paradox box of this “Guide Line”.

See, it's there on our RBI’s official website: www.rbi.org

Please review the Circular Named as: RBI/2012-13/71 DBOD.No.FSD.BC. 23/

24.01.011/2012 – 13; July 2, 2012, Ashadha 11, 1934 (Saka)

It’s called as “Master Circular on Credit Card Operations of Banks”, out here I am trying to furnish some of the facts extracted from the said circular which I think would be an eye opener for many of us.

(PLEASE NOTE: All ‘Blue’ colored statements are mine and nothing to do with the actual guide lines of RBI)

1. The main purpose of this circular is to ensure that their credit card operations are run on sound, prudent and customer friendly manner.

Ho! Come on ‘customer friendly’ typo error – it's should be ‘Bank Friendly’

2. There are different categories of cards named as platinum, gold or classic to differentiate the services offered on each card and the income eligibility criteria.

Income! Who cares for that you just have the card first!

3. Fair Practices Code, states that “The Banks’ Fair Practices Code should at a minimum, incorporate the relevant guidelines contained in this Master Circular. Banks / NBFCs should also widely disseminate the contents of this Master Circular including through their websites.

Website run kar nay ka paisa – Master Circular display kar ney say nahi aayega…….bhol jao usko!

4. It is reiterated (means: repeatedly) that banks should convey in writing the main reason / reasons which have led to the rejection of the credit card applications.

Have we ever heard about such ruling before? Customer Service guys say that your application has been rejected due to some ‘confidential’ reasons. Which they are not going to tell us, then mere bhai kisey batao gey mere boss ko?

5. “The Most Important Terms and Conditions (MITCs) termed as standard set of conditions, as given in the Annex, should be highlighted and advertised / sent separately to the prospective customers / customers at all the stages i.e. during marketing, at the time of application, at the acceptance stage (welcome kit) and in important subsequent communications.

They are rather more interested in their own product advertisement they have hardly any time to highlight MITC!

6. Interest Rates: “Interest Rates which vary based on the payment / default history of the cardholder, there should be transparency in levying of such differential interest rates. The fact that higher interest rates are being charged to the cardholder on account of his payment / default history should be made known to the cardholder.”

Guide Lines hai bhai, Guide Lines! Don’t dare to ask any further questions to the customer services guys because again its there standard answer – ‘As per the Guide Lines the rates are applicable’, so relax and suffer.

7. “Card issuers should ensure that there is no delay in dispatching bills and the customer has sufficient number of days (at least one fortnight) for making payment before the interest starts getting charged.”

'Bills’ kya usko dispatch bhi karna hota hai, woh bhi 14 din pahley? Kya baat kartey ho bhai?

8. They should quote Annualized Percentage Rates (APR) on cards products separately for retail purchase and for cash advance, if different.

Lo kar lo baat ab customer ko pheley APR explain karo? Just forget it yaar, no one knows about it hence no one shall ask us for it!

9. “The late payment charges, including the method of calculation of such charge and the number of days, should be prominently indicated, even where the minimum amount indicated to keep the card valid has been paid, it should be indicated in bold letters that the interest will be charged on the amount due after the due date of payment.”

10. “A legend / notice to the effect that – ‘Making only the minimum payment every month would result in the repayment stretching over years with consequent interest payment on your outstanding balance’ should be prominently displayed in all the monthly statements so as to caution the customers about the pitfalls in paying only the minimum amount due.”

11. “Free credit period is lost if any balance of the previous month’s bill is outstanding.

Bhai agar ye sab main pad gaye to dhanda chal chukka hamara, late payment charges ka hi to hum khatein hain bhai, chalney do jaisa chal raha hai.

12. “The Banks should not levy any charge that was not explicitly indicated to the card holder at the time of issue of the card and without getting his/her consent” Excluding any government taxes.

13. Any changes in charges may be made only with prospective effect giving notice of at least one month.

What do you mean by explicitly indicated – we just do it for our product promotions rest – perdein mein rahnein do, verna raaz khul jaye gaa!!

14. “If a credit card holder desires to surrender his credit card on account of any change in credit card charges to his disadvantage, he may be permitted to do so without the bank levying any extra charge for such closure, and any request for a closure of a credit card has to be honoured immediately by the credit card issuer, subject to full settlement of dues by the cardholder.”

Come on yaar! customer ko janey mut do, start selling him another product immediately, start providing him with some more seems to be lucrative offers, phasalo jaal mein. Nai maan raha ho to call hi disconnect kar do, do char bar kare ga phir thak kar chup ho jayega, bus apna kam ho gaya na, card band nahi hua, enjoy!!

15. “There should be transparency (without any hidden charges) in issuing credit cards free of charge during the first year.

Transparency what is that? The product which is used for projectors? Is ka credit card mein kya kaam hai bhai!!

16. Wrongful Billing – “The card issuing bank should ensure that wrong bills are not raised and issued to customers. In case, a customer protests any bill, the bank should provide explanation and, if necessary, documentary evidence may also be provided to the customer within a maximum period of sixty days with a spirit to amicably redress the grievances.”

If we email then an automated reply that we have received your email and shall get back to you in next 3 working days, if we call then the executive shall reply that your complain has been forward to the concern department they are going to get back to you ASAP. Even if they resolve the issue then too they do not explain us the reason for providing us with a wrong bill, forget about documented evidence!! Aren’t they are suppose to compensate us for the mental agony, sleepless night, higher palpitation and wondering the whole day where we went wrong while using our card ?

17. Use of DSA (Direct Sales Agents) or DMA (Direct Marketing Agents) – there is a detailed and separate guide lines for there appointments and the way they are suppose to operate and contact us. How much information our bank can share with them is also defined.

Should I comment anything about this section? Each one of us must have one or several experience related to it.

18. Now comes the – Protection of Customer Rights in brief – No Unsolicited Card should be issued ; We can approach the Banking Ombudsman for getting our compensation; Banks can not charge us for the lost and misused card (unsolicited cards); the consent for issuance of the card should be explicit and should not be implied; No unsolicited credit facility should be extended without the consent of the card holder; should not unilaterally upgrade credit card and enhance credit limits; Do not call Registry (DNCR) again there is a detailed rules for this too; Our Telecom Service Provider has been directed to disconnect the telephone line connections provided to the telemarketers in case of violation of the UCC Regulations by them; Hon’ble Supreme Court has recently directed that any telemarketer who is not registered with the Department of Telecommunication (DoT) should not be permitted to operate the telemarketing services and as such any employment to telemarketer who is not registered with DoT by banks would be treated as a violation of Hon’ble Supreme Court’s direction.

We come to know about such incidents when we receive a bill on our address and yes point to be noted, we’ll receive the bill of these unsolicited cards without any default and on time but won’t get our genuine bills on time. If we go ahead and inquire then they inform us that we had actually approved for such a card to our surprise!! I think that Doremon must have provided them with some kind of gadgets which can read our mind!

19. Customer confidentiality - “Before providing information relating to credit history / repayment record of the card holder to Credit Information Bureau (India) Limited in short CIBIL, the bank explicitly bring to the notice of the customer that such information is being provided in terms of the Credit Information Companies (Regulation) Act, 2005, the bank have to provide with a notice to such card holders about the intention to report the matter of there default to the CIBIL with an intention to withdraw the reporting in the event the customer settles his / her dues after having been reported as defaulter.

Please go through your monthly bills there must be an area which states that “All banks and financial institutions participating in this initiative are required to share customer data with CIBIL”, don’t you think that they are actually threatening us? What they are actually suppose to do when it’s required, is been twisted to show us a different picture.

20. Fair Practices in debt collections: “All letters by recovery agents must contain the name and address of a responsible senior officer of the card issuing bank whom the customer can contact at his location.”; No intimidation (means – terrorize) or harassment of any kind either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly.

Letter from a recovery agent? Have you ever seen that? If he is going to issue a letter to kam ho gaya? Intimidation / harassment – Na re Na kahan hota hai bhai….we are thorough gentlemen’s hum to uchee awaj mein baat bhi nahi kartein hai aap Intimidation / harassment ki baat kar rahein hain.

21. Insurance Cover to Cardholders: “Banks may also consider issuing 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.” Any insurance cover for lost or stolen card liabilities arising out of such cases, should be made clear to the customer, in other words only those cardholders who are ready to bear the cost of the premium should be provided an appropriate insurance cover.

Bhai out here I would like to point out that it’s our fault not anyone else because we do not read the form which the bank provide to us before signing the form. We just do it blindly. That’s it! We all get defeated at the end. Please for heaven sake kindly read the document carefully rather regretting later on. DO NOT be in hurry ask your agent to come back again after some time once you have read the document at your leisure, if he needs business he would obey you.

One more appeal to all the readers, please do go through the RBI (above mentioned) guide lines, it’s very useful information which we all should know.

Thank you.

The above mentioned article is purely the author’s point of view his versions and understanding, readers are requested to refer the government websites, for further clarifications.

Pranab Roy Chowdhury

B.Com., MBL, LL.b

Advocate

Member: All India Federation of Tax Practitioners

Partner: M/s AP Associates Legal Consultant

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