IDFC First Bank is Not Following RBI Guidelines

[Umang85]

Just applied the card, now IDFC started asking for joining fee payment upfront using various methods to be done first before the card is issued. Paid 7078 using UPI

Shouldn't have to pay anything upfront. Statement shouldnt even be generated.

 

[TechnoFinoTechnoFino is verified member.]

Update on 8th November, 2024:

IDFC FIRST Bank has recently added a statement in bold text under the "Fees and Charges" section for the Mayura and Ashva credit cards, stating: "Upfront payment of Joining Fee + GST required for dispatch of metal credit card. The fee is non-refundable."

I understand why banks want to charge an upfront, non-refundable fee before dispatching a metal credit card, as it incurs high costs for manufacturing and delivery. However, banks must also adhere to the clear guidelines set by the RBI, which prohibit charging a joining fee until the customer has activated the credit card.

Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 (Updated as on March 07, 2024)
6. Issue of Credit Cards
(a) Customer Acquisition:
vi. Card-issuers shall seek One Time Password (OTP) based consent from the cardholder for activating a credit card, if the same has not been activated by the customer for more than 30 days from the date of issuance. If no consent is received for activating the card, card-issuers shall close the credit card account without any cost to the customer within seven working days from date of seeking confirmation from the customer. In case of a renewed or replaced card, the closure of an inactivated card shall be subject to payment of all dues by the cardholder.

According to these guidelines, if a customer chooses not to activate their card within 30 days, the bank must cancel the credit card within 7 days without reporting it to any credit bureau or charging any fees.

IDFC FIRST Bank has mentioned that they will charge a non-refundable joining fee before dispatching the credit card. Is this even legal or allowed, considering that the RBI has guidelines preventing banks from doing so?

I don’t understand why banks can’t find an alternative solution that doesn’t harm customers while also protecting the bank’s interests. My suggestion would be for the bank to issue a temporary virtual card (with a different card number than the physical card) once the customer is approved, the bank should ask the customer to activate it. The physical card would only be delivered after the customer activates the virtual card.

This approach would ensure compliance with RBI guidelines while minimizing costs and providing customers a fair experience.
It’s surprising that a few people on X are justifying this move.

 

[aniketkr.sharma]

Hello TFCians,

Recently, I applied for the IDFC First Mayura Credit Card just for review purposes, as this card is not value for money, as I mentioned in my review article. I only planned to hold it for the first year. I've written a detailed review of this product, which you can check here: https://www.technofino.in/community...eview-is-it-truly-a-super-premium-card.31050/

After applying for the credit card, my application was approved within seconds, and the Mayura card began reflecting on my IDFC First mobile app within minutes. I hadn't activated the card, nor had I created a PIN. Essentially, I just applied, got approved, and did nothing further. Five days later, my Mayura card was delivered. Upon checking the IDFC First Bank app after delivery, I was shocked to find a charge of ₹7,078.82 on my Mayura card.

View attachment 68278


According to RBI guidelines, the bank cannot charge a joining fee until you activate the card. I decided not to activate the card and raised the issue with IDFC First Bank to understand why they weren't adhering to the guidelines.

To my further surprise, the next day, I received an SMS from CIBIL informing me that a new account had been added to my CIBIL report. When I checked my report, I found that IDFC First Bank had added the IDFC First Mayura credit card account, even though I hadn't activated the card yet.

View attachment 68277



As per RBI guidelines, the bank cannot add a newly opened credit card account to CIBIL or any other credit bureau report until the customer activates the card. But IDFC First Bank is doing the opposite. I don’t understand how such a well-established bank can fail to follow such basic guidelines.

While I know the rule and won’t accept any justification from the bank, many people may not be aware of these regulations and could be misled by the banks themselves. The RBI should take strict action against such banks to ensure they adhere to the guidelines, and banks must start following the rules out of fear of stringent action from the RBI.

Update on 11th September 2024:

I received a call from IDFC First Bank on 10th September 2024, informing me that they are working on the complaint and feedback I raised on social media and will provide a solution soon. On 11th September 2024 morning, I received another call from the senior executive team, stating that they had reviewed my issue with their concerned department.

The senior executive informed me that IDFC First Bank is fully complying with RBI guidelines. She explained:

1. Regarding Joining Fees: When applying for the Mayura credit card, it is clearly mentioned that the fees will be charged immediately, but customers are allowed to pay the fees after the statement is generated.
2. Regarding Credit Reporting: As per RBI guidelines, the bank has reported my Mayura credit card to CIBIL. She cited two reasons:
   • If a bank issues a "fee-based" card, it is allowed to report it to CIBIL even if the card is not activated.
   • My card was activated on 2nd September 2024, when I logged into the IDFC First Bank mobile app and checked the credit card section. According to the executive team, logging in and clicking on the credit card section is considered consent for activating the new card.

I was genuinely amazed by her response and found myself speechless. Then, I told her that I needed everything she said in writing via email. I also pointed out that the RBI's master guidelines for credit and debit cards do not classify cards as "fee-based" or "free." Where are they getting this information from? Furthermore, according to RBI guidelines, there are specific actions that count as consent for activating credit cards, and merely logging into the mobile app or clicking on the credit card section does not qualify as consent.

I also mentioned that just because you state the joining fees will be charged immediately doesn’t mean you’re allowed to do so. If the card has to be closed after 30 days if a customer doesn’t activate it, why post the joining fees in the first place? And why report the posted joining fees as an outstanding balance to CIBIL?

After the call, I was in disbelief at how a bank like IDFC First could take the regulator’s guidelines so lightly. I would definitely like to speak to their compliance head to better understand their perspective on this matter. As of now, while writing this post, I still haven't received any email from IDFC First Bank, despite the executive assuring me that I would receive one after the call.

For everyone's reference, here are the RBI guidelines regarding card activation consent:


Many people are experiencing issues with non-compliance from banks. After my post, several individuals shared that other banks had also charged their accounts before card activation and reported their new accounts to CIBIL prematurely. It’s high time the RBI steps in and takes strict action against such banks or card issuers to protect customers' interests. Ultimately, the RBI exists to safeguard customers like us.

Update on 12th September, 2024:

IDFC First Bank called me yesterday evening to explain the situation, and I understand their perspective. However, I still don’t agree with them and believe IDFC First Bank needs to resolve the issue.

Rahul explained that they activate the card based on the "customer's intention to use the card." If a customer opens the IDFC First Bank credit card section and clicks on the newly approved card, they activate it and report it to CIBIL.

However, this process doesn’t align with the guidelines, and Rahul assured me that feedback from myself and others who raised this issue will be discussed with top-level management, and they will work on improving the process.

Rahul was very humble and even offered me some reward points for highlighting the issue, but I believe solving the problem would be more valuable than receiving free points. I respectfully declined his offer and simply requested that he share my feedback with the management team. Today, I received an email from IDFC First Bank informing me that they have reversed the joining fee.

View attachment 68624

I often highlight issues with banks, but only a few have the courage to acknowledge their mistakes, take customer feedback seriously, and act on it. A few months ago, I thanked IDFC First Bank for this, and I would like to thank them again for listening to their customers. Hopefully, they will resolve the issue soon.

Update on 20 Sept 2024:
I received a call from Rahul again, and he was very happy to share that the matter had been discussed with management. They will be making some changes to their app, which will be deployed soon. After these changes, customers will have more clarity on the card activation process.
I must say, IDFC First Bank listens to its customers and makes the necessary improvements.
Wishing IDFC First Bank all the best—keep listening to your customers to continue improving!

Update on 8th November, 2024:

IDFC FIRST Bank has recently added a statement in bold text under the "Fees and Charges" section for the Mayura and Ashva credit cards, stating: "Upfront payment of Joining Fee + GST required for dispatch of metal credit card. The fee is non-refundable."

View attachment 74368

I understand why banks want to charge an upfront, non-refundable fee before dispatching a metal credit card, as it incurs high costs for manufacturing and delivery. However, banks must also adhere to the clear guidelines set by the RBI, which prohibit charging a joining fee until the customer has activated the credit card.

According to these guidelines, if a customer chooses not to activate their card within 30 days, the bank must cancel the credit card within 7 days without reporting it to any credit bureau or charging any fees.

IDFC FIRST Bank has mentioned that they will charge a non-refundable joining fee before dispatching the credit card. Is this even legal or allowed, considering that the RBI has guidelines preventing banks from doing so?

I don’t understand why banks can’t find an alternative solution that doesn’t harm customers while also protecting the bank’s interests. My suggestion would be for the bank to issue a temporary virtual card (with a different card number than the physical card) once the customer is approved, the bank should ask the customer to activate it. The physical card would only be delivered after the customer activates the virtual card.

This approach would ensure compliance with RBI guidelines while minimizing costs and providing customers a fair experience.
It’s surprising that a few people on X are justifying this move.

Note: My issue was resolved in 20th Sept, 2024.

I am facing same with axis too when I cancelled the magnus without activating it and they also reported in my cibil for joining fees, and as the card is cancelled the joining fees were reversed as axis provides shared limit and I can see full limit on my privilege card, so should I also register a complaint with axis about this?

 

[TechnoFinoTechnoFino is verified member.]

I am facing same with axis too when I cancelled the magnus without activating it and they also reported in my cibil for joining fees, and as the card is cancelled the joining fees were reversed as axis provides shared limit and I can see full limit on my privilege card, so should I also register a complaint with axis about this?

Yes, you should. They have to fix the issue in less than 30 day or they have to pay penalties.

 

[aniketkr.sharma]

Hello TFCians,

Recently, I applied for the IDFC First Mayura Credit Card just for review purposes, as this card is not value for money, as I mentioned in my review article. I only planned to hold it for the first year. I've written a detailed review of this product, which you can check here: https://www.technofino.in/community...eview-is-it-truly-a-super-premium-card.31050/

After applying for the credit card, my application was approved within seconds, and the Mayura card began reflecting on my IDFC First mobile app within minutes. I hadn't activated the card, nor had I created a PIN. Essentially, I just applied, got approved, and did nothing further. Five days later, my Mayura card was delivered. Upon checking the IDFC First Bank app after delivery, I was shocked to find a charge of ₹7,078.82 on my Mayura card.

View attachment 68278


According to RBI guidelines, the bank cannot charge a joining fee until you activate the card. I decided not to activate the card and raised the issue with IDFC First Bank to understand why they weren't adhering to the guidelines.

To my further surprise, the next day, I received an SMS from CIBIL informing me that a new account had been added to my CIBIL report. When I checked my report, I found that IDFC First Bank had added the IDFC First Mayura credit card account, even though I hadn't activated the card yet.

View attachment 68277



As per RBI guidelines, the bank cannot add a newly opened credit card account to CIBIL or any other credit bureau report until the customer activates the card. But IDFC First Bank is doing the opposite. I don’t understand how such a well-established bank can fail to follow such basic guidelines.

While I know the rule and won’t accept any justification from the bank, many people may not be aware of these regulations and could be misled by the banks themselves. The RBI should take strict action against such banks to ensure they adhere to the guidelines, and banks must start following the rules out of fear of stringent action from the RBI.

Update on 11th September 2024:

I received a call from IDFC First Bank on 10th September 2024, informing me that they are working on the complaint and feedback I raised on social media and will provide a solution soon. On 11th September 2024 morning, I received another call from the senior executive team, stating that they had reviewed my issue with their concerned department.

The senior executive informed me that IDFC First Bank is fully complying with RBI guidelines. She explained:

1. Regarding Joining Fees: When applying for the Mayura credit card, it is clearly mentioned that the fees will be charged immediately, but customers are allowed to pay the fees after the statement is generated.
2. Regarding Credit Reporting: As per RBI guidelines, the bank has reported my Mayura credit card to CIBIL. She cited two reasons:
   • If a bank issues a "fee-based" card, it is allowed to report it to CIBIL even if the card is not activated.
   • My card was activated on 2nd September 2024, when I logged into the IDFC First Bank mobile app and checked the credit card section. According to the executive team, logging in and clicking on the credit card section is considered consent for activating the new card.

I was genuinely amazed by her response and found myself speechless. Then, I told her that I needed everything she said in writing via email. I also pointed out that the RBI's master guidelines for credit and debit cards do not classify cards as "fee-based" or "free." Where are they getting this information from? Furthermore, according to RBI guidelines, there are specific actions that count as consent for activating credit cards, and merely logging into the mobile app or clicking on the credit card section does not qualify as consent.

I also mentioned that just because you state the joining fees will be charged immediately doesn’t mean you’re allowed to do so. If the card has to be closed after 30 days if a customer doesn’t activate it, why post the joining fees in the first place? And why report the posted joining fees as an outstanding balance to CIBIL?

After the call, I was in disbelief at how a bank like IDFC First could take the regulator’s guidelines so lightly. I would definitely like to speak to their compliance head to better understand their perspective on this matter. As of now, while writing this post, I still haven't received any email from IDFC First Bank, despite the executive assuring me that I would receive one after the call.

For everyone's reference, here are the RBI guidelines regarding card activation consent:


Many people are experiencing issues with non-compliance from banks. After my post, several individuals shared that other banks had also charged their accounts before card activation and reported their new accounts to CIBIL prematurely. It’s high time the RBI steps in and takes strict action against such banks or card issuers to protect customers' interests. Ultimately, the RBI exists to safeguard customers like us.

Update on 12th September, 2024:

IDFC First Bank called me yesterday evening to explain the situation, and I understand their perspective. However, I still don’t agree with them and believe IDFC First Bank needs to resolve the issue.

Rahul explained that they activate the card based on the "customer's intention to use the card." If a customer opens the IDFC First Bank credit card section and clicks on the newly approved card, they activate it and report it to CIBIL.

However, this process doesn’t align with the guidelines, and Rahul assured me that feedback from myself and others who raised this issue will be discussed with top-level management, and they will work on improving the process.

Rahul was very humble and even offered me some reward points for highlighting the issue, but I believe solving the problem would be more valuable than receiving free points. I respectfully declined his offer and simply requested that he share my feedback with the management team. Today, I received an email from IDFC First Bank informing me that they have reversed the joining fee.

View attachment 68624

I often highlight issues with banks, but only a few have the courage to acknowledge their mistakes, take customer feedback seriously, and act on it. A few months ago, I thanked IDFC First Bank for this, and I would like to thank them again for listening to their customers. Hopefully, they will resolve the issue soon.

Update on 20 Sept 2024:
I received a call from Rahul again, and he was very happy to share that the matter had been discussed with management. They will be making some changes to their app, which will be deployed soon. After these changes, customers will have more clarity on the card activation process.
I must say, IDFC First Bank listens to its customers and makes the necessary improvements.
Wishing IDFC First Bank all the best—keep listening to your customers to continue improving!

Update on 8th November, 2024:

IDFC FIRST Bank has recently added a statement in bold text under the "Fees and Charges" section for the Mayura and Ashva credit cards, stating: "Upfront payment of Joining Fee + GST required for dispatch of metal credit card. The fee is non-refundable."

View attachment 74368

I understand why banks want to charge an upfront, non-refundable fee before dispatching a metal credit card, as it incurs high costs for manufacturing and delivery. However, banks must also adhere to the clear guidelines set by the RBI, which prohibit charging a joining fee until the customer has activated the credit card.

According to these guidelines, if a customer chooses not to activate their card within 30 days, the bank must cancel the credit card within 7 days without reporting it to any credit bureau or charging any fees.

IDFC FIRST Bank has mentioned that they will charge a non-refundable joining fee before dispatching the credit card. Is this even legal or allowed, considering that the RBI has guidelines preventing banks from doing so?

I don’t understand why banks can’t find an alternative solution that doesn’t harm customers while also protecting the bank’s interests. My suggestion would be for the bank to issue a temporary virtual card (with a different card number than the physical card) once the customer is approved, the bank should ask the customer to activate it. The physical card would only be delivered after the customer activates the virtual card.

This approach would ensure compliance with RBI guidelines while minimizing costs and providing customers a fair experience.
It’s surprising that a few people on X are justifying this move.

Note: My issue was resolved in 20th Sept, 2024.

I am facing same with axis too when I cancelled the magnus without activating it and they also reported in my cibil for joining fees, and as the card is cancelled the joining fees were reversed as axis provides shared limit and I can see full limit on my privilege card, so should I also register a complaint with axis about this

Yes, you should. They have to fix the issue in less than 30 day or they have to pay penalties.

Great i will raise it early morning tomorrow.
Thanks

 

[aniketkr.sharma]

Yes, you should. They have to fix the issue in less than 30 day or they have to pay penalties.

Do i have to raise a complaint on RBI Ombudsman for this too or only with axis?

 

[TechnoFinoTechnoFino is verified member.]

Do i have to raise a complaint on RBI Ombudsman for this too or only with axis?

first you should contact axis. If they don't resolve your issue in 30 days or decline your request, file complaint with the RBI Banking ombudsman in that case.