Seeking clarification regarding RBI Master Direction clause

[xfactcc]

This is from Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 Chapter-II, 6, (a),:

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.

Here does 'seeking confirmation from the customer' mean just notifying the customer or after receiving confirmation/consent/engagement from the customer?

For e.g., In 2023 I had a credit card closed by Axis Bank because I did not activate it within 30 days, I did not have to give any confirmation, consent, or engagement, it was itself closed from their end, I was given multiple notices.

 

[techt]

@Bugs Bunny - finto needs justice.

 

[Bugs Bunny]

@Bugs Bunny - finto needs justice.

Here does 'seeking confirmation from the customer' mean just notifying the customer or after receiving confirmation/consent/engagement from the customer?

I guess mere notifying the customer would suffice, because companies can't run behind a customer to get the consent to close the inactivated card.

 

[xfactcc]

I guess mere notifying the customer would suffice, because companies can't run behind a customer to get the consent to close the inactivated card.

Regardless, it reads like customer must confirm before card is closed as per RBI. 🤔

 

[Bugs Bunny]

Regardless, it reads like customer must confirm before card is closed as per RBI. 🤔

I guess literal interpretation should be avoided here, purposive interpretation may be done and purpose is to protect customers from mis selling if I'm not wrong.

 

[arun4455]

This is from Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022 Chapter-II, 6, (a),:

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.

Here does 'seeking confirmation from the customer' mean just notifying the customer or after receiving confirmation/consent/engagement from the customer?

For e.g., In 2023 I had a credit card closed by Axis Bank because I did not activate it within 30 days, I did not have to give any confirmation, consent, or engagement, it was itself closed from their end, I was given multiple notices.

Notifying the customer is fine. Then bank start sending multiple reminders to activate the card through all channels of communication. OTP verification is required only for activating the card, not for the closure.

 

[FinoGuy]

Yes. Costumer has to confirm that he wants to keep the card either by setting pin or by doing any transaction on card. This way the otp criteria will be autofullfilled. Otherwise the card will get automatically cancelled on 38th day.. All banks follow this..
(OTP verification is required to ensure that the card is really in the customer's hand & not misused by somebody else)

 

[xfactcc]

I wish RBI had a helpline of sorts where we could directly ask how they interpret their own clauses.