New RBI Credit Card Rules: Everything You Must Know

Credit cards have revolutionised the way we spend, right? However, as they become more integrated into our wallets and daily life expenses, security and transparency have become top priorities. 

From approximately 356 crore credit card transactions in FY 2024 to a projected 900 crore by FY 2029, India’s digital payment landscape is evolving at lightning speed. There's a high chance that you might also be using your credit card for everything from buying groceries to booking a hotel or flight for vacation.

Think about it: you easily swipe, shop, and enjoy the benefits of your credit card. But have you ever wondered enough how safe these transactions truly were?

To get this burden out of your head, the Reserve Bank of India (RBI), the financial watchdog, has introduced comprehensive guidelines to secure your credit card. From fraud prevention to new rules on payments, these latest RBI credit card regulations will be your financial safety net in today’s digital world.

Let’s understand these new credit card-related RBI regulations aimed at reducing fraud, simplifying fees, and boosting transparency.

Table of Contents:

• Importance of RBI Guidelines for Credit Cards
• Latest RBI Guidelines
• Key Changes Introduced by RBI for Credit Card Operations
• RBI Guidelines for Credit Card Issuance
• Steps to Close a Credit Card as per RBI Guidelines
• Conclusion
• FAQs on RBI Credit Card Guidelines

Importance of RBI Guidelines for Credit Cards

The significance of RBI guidelines for credit cards cannot be overstated. Simply think of RBI credit card guidelines as the “traffic lights” of the financial world. From protecting you against fraud to ensuring fair practices by card issuers, these rules are crucial for making your credit card experience safer, organised, and more transparent. 

As a regulator, the RBI helps in:

• Protecting consumers: The RBI ensures that credit card issuers follow transparent and ethical practices when issuing credit cards, collecting payments, and handling customer disputes.
• Promoting financial literacy: By setting clear rules, the RBI encourages cardholders to understand the terms and conditions (the do’s and don'ts) of credit card usage. This reduces the chances of mismanagement and keeps you on track to avoid the trap of over-borrowing.
• Enhancing security: With rising concerns over cybersecurity and fraud, RBI guidelines emphasise strong authentication, tokenisation, and risk-based security measures. Starting April 1, 2026, all domestic digital payments will require two independent authentication factors, with at least one dynamic factor.
• Streamlining dispute resolution: RBI mandates clear and swift complaint resolution pathways, ensuring that cardholder issues are addressed quickly and fairly.

As the financial world evolves, so do the rules that keep your credit card usage safe and transparent. Let's know the recent RBI guidelines in detail. 

Latest RBI Guidelines

As of 2025, the RBI has introduced updated regulations for credit cards to tighten security, improve user experience, and provide better control over transactions. 

Here are the latest RBI guidelines for credit cards:

• 15-day credit reporting rule:  Banks and NBFCs must report credit card activity and payments to credit bureaus every 15 days. This ensures faster updates to your credit report, helping maintain or improve your credit score.
• Mandatory tokenisation of Card-on-File (CoF) data: Merchants cannot store full card PAN/CVV. Instead, a unique token represents your card, and creating this token requires your explicit consent and additional authentication. Banks can now provide token creation through their apps or netbanking, making online payments safer and convenient. 
• Standardisation of fees and charges: No more hidden fees. Issuers must clearly disclose annual fees, issuance charges, late fees, and other costs, helping you compare cards easily.
• Late payment penalties: RBI mandates transparent late payment penalties, with interest on overdue amounts following a fair, standardised structure. This protects cardholders from arbitrary charges.
• Risk-based authentication: Banks may require additional verification for high-value or suspicious transactions based on transaction amount, device, location, or user behaviour.
• Cross-border card-not-present validation: For non-recurring international transactions, issuers must support additional authentication requested by overseas merchants or acquirers 

Note: RBI has not mandated a universal opt-out for EMIs, a central card registry, or standardised EMI terms. However, consent and disclosure rules remain mandatory.

Key Changes Introduced by RBI for Credit Card Operations

The RBI has introduced several crucial updates to improve consumer experience, transparency, and fraud prevention in the credit card ecosystem. Here’s a detailed look at the most important changes:

1. Mandatory Registration of Credit Cards

Under the new RBI guidelines, all credit cards issued by banks and NBFCs must be registered in a centralised or issuer database. This ensures:

• Traceability: Every credit card in circulation is now traceable, helping regulators, issuers, and authorities track its usage. This is particularly useful in detecting fraudulent or stolen cards.
   
• Fraud prevention: Cards that are not registered or reported as lost/stolen can be quickly deactivated, reducing unauthorised usage.
   
• Consumer protection: Cardholders can be confident that the card they are issued is legitimate and monitored under RBI rules.

Example: If you report your card as lost or compromised, the bank can immediately block it across all linked merchant systems, preventing misuse.

2. Card-on-File (CoF) Tokenisation

One of the most significant changes for digital payment security is the RBI’s mandate for CoF tokenisation:

• What it is: Instead of storing your actual credit card number (PAN, CVV) with merchants, a unique token is generated to represent your card for online or recurring transactions.
   
• How it works: The token is merchant-specific, meaning it can only be used with the merchant who created it. Even if the merchant’s database is hacked, your actual card information cannot be stolen.
   
• Consent & authentication: Tokenisation requires explicit consent from you, along with additional authentication through your bank app, netbanking, or OTP.

Benefits for users:

• Enhanced security: Sensitive card details are never stored on merchant servers. Even in the case of a breach, your card cannot be misused.
   
• Seamless convenience: You can continue using your saved card for recurring or online payments without repeatedly entering card details.
   
• Control over transactions: You can create, update, or delete tokens directly from your bank account or app, giving full control over digital payments.

Example: If you have a subscription to an OTT platform like Netflix, your card is tokenised. The Netflix system stores only the token, not your actual card details, keeping your card safe.

3. Opt-Out Feature for EMI/Loan Conversions

Previously, some credit card issuers automatically converted large purchases into EMIs (equated monthly instalments) or offered instant loan conversion options without giving users clear choices.

• What’s new: RBI now mandates that cardholders must have the right to opt out of EMI or loan conversion schemes offered by their issuer.
   
• Why it matters: You are not forced into financial agreements that may increase interest costs or impact your credit limit unnecessarily.
   
• Transparency: Banks must clearly communicate the terms, interest rates, and any fees associated with EMI or loan conversion, allowing informed decision-making.

Example: Suppose you make a purchase of ₹50,000 on your credit card. Previously, the bank could auto-convert it into a 6-month EMI without your consent. Now, you can choose whether to take EMI or pay in full, avoiding unplanned debt.

Thinking of getting a new credit card? Check this out first: the process of obtaining a credit card can be overwhelming, but the RBI’s guidelines simplify it with clear, fair rules. 

RBI Guidelines for Credit Card Issuance

The RBI has established a clear framework for issuing credit cards. Banks and financial institutions must follow the new clear credit card rules by RBI, ensuring the new credit cardholders will stay protected. These rules ensure that:

• Defined eligibility criteria: The eligibility for a credit card is now crystal clear. They are clearly defined based on income, credit history, and overall financial stability.
   
• Transparency in fees and charges: No more worrying about hidden fees! The fees for issuing a card, annual maintenance charges, and other charges must be clearly communicated to the applicant so there are no surprises later.
   
• Responsible lending: Issuers are prohibited from offering credit cards to individuals who may not be able to repay the debt. Credit limits are now set in accordance with an individual’s ability to repay, ensuring a fair and manageable credit experience.

Steps to Close a Credit Card as per RBI Guidelines

Closing a credit card is a vital decision and should be done with care. The RBI has set clear guidelines for this process to ensure everything is handled smoothly. Below are the steps to follow for closing your credit card:

• Clear pending dues: Before closing your card, pay off all outstanding balances, including principal, interest, fees, and charges. This prevents any future disputes or negative impact on your credit score.
   
• Submit closure request: Contact your credit card issuer via app, website, customer care, or branch, and formally request account closure. Some banks may require a written form or email confirmation.
   
• Get written confirmation: Once your card is closed, ask for a written confirmation and ensure that the issuer updates the credit bureaus about the closure.
   
• Monitor your credit report: After the card is closed, keep an eye on your credit report to ensure that it reflects the closure accurately.
   
• Update Linked Payments: If the card was linked to subscriptions or EMIs, switch them to another payment method to avoid missed payments or penalties.

Following these steps helps you exit your credit card responsibly, protecting your finances and ensuring a clean credit record.

Conclusion

The RBI credit card rules are crucial in ensuring the safety and fairness of credit card operations in India. By understanding and adhering to credit card RBI guidelines, both consumers and issuers can enjoy a smoother and safer financial experience. 

Whether it’s the latest updates on credit card tokenisation, new rules on credit card late payments, or clearer credit card issuance guidelines, the RBI’s involvement in regulating the credit card industry is essential for building trust and stability in the financial system.

With a focus on transparency, fairness, and security, these updated RBI guidelines for credit cards are set to transform the way we experience credit card payments in India. 

The intention is clear: to protect cardholders, eliminate unethical practices, and ensure that the terms of usage are transparent and easily understood by all. 

And, if you’re looking for the “perfect” credit card that matches your spending needs, explore top recommendations and detailed comparisons at Finology Select.

Looking for a secure way to start your credit journey under RBI rules? Explore the Best Secured Credit Cards for new credit users.

FAQs on RBI Credit Card Guidelines

1. What are the latest RBI guidelines for credit card late payments?
The latest RBI guidelines require issuers to clearly disclose late payment fees and interest on overdue amounts. Charges must follow a fair, standardised structure, protecting cardholders from hidden or arbitrary penalties.

2. How often must banks update credit card activity with credit bureaus?
Banks and NBFCs must report credit card payments and activity to credit bureaus at least every 15 days. This ensures that your credit score reflects timely repayments and remains up-to-date.

3. What is Card-on-File (CoF) tokenisation?
CoF tokenisation is a security measure where your actual card details are replaced by a unique digital token for online and recurring transactions. This keeps sensitive information safe even if the merchant’s system is compromised.

4. How does tokenisation improve credit card security?
Tokenisation prevents merchants from storing your actual card details. Even if a merchant is hacked, the token cannot be misused, giving you enhanced protection while shopping online.

5. Can I opt out of EMI or loan conversions on my credit card?
Yes. RBI guidelines allow cardholders to opt out of EMI or loan conversion options. Banks must clearly disclose terms, interest rates, and fees, so you can make informed choices without being forced into unwanted agreements.

6. What are the eligibility criteria for obtaining a credit card under RBI rules?
Eligibility is based on income, credit history, and overall financial stability. RBI rules also require issuers to set credit limits responsibly, ensuring borrowers are not overextended and can manage repayments comfortably.