The Hindu Business Line : Evolve code of conduct for issuing credit cards, RBI tells banks

The Reserve Bank of India has asked the Indian Banks' Association (IBA) to evolve a code of conduct to be adopted voluntarily by banks. This follows a meeting on Friday between the RBI and banks issuing credit cards.

Banks have also advised been to issue appropriate code of conduct to direct selling agents (DSAs) marketing their credit card products and cautioned to take pre-emptive steps to prevent avoidable litigations.

The meeting discussed complaints against card issuing banks on harassment of customers, receiving unsolicited cards, wrongful activation of cards, lack of transparency in levying service or other charges, and absence of an effective grievance redressal machinery.

According to a release, the RBI has of late been receiving a large number of complaints from various organisations, associations, media and members of the public against credit card issuing banks.

"The focus of the meeting was to examine all the issues and minimise complaints against credit card operations of banks and to see that customer grievances could be resolved."

The banks assured the RBI that they had systems in place to check the level of service rendered by DSAs and also had a mechanism for redressal of customer grievances.

However, they argued that it was difficult to prevent the sale of databases in the absence of any strict privacy laws in the country, which in turn, made it difficult to control unsolicited calls.

The apex bank has reiterated that banks issuing credit cards should be more receptive to customer complains and constitute proper grievance redressal cells to mitigate the hardships caused to credit card customers.

The RBI recently set up a working group for evolving a regulatory mechanism for credit cards, to suggest the type of regulatory measures required for plastic cards in order to encourage growth in a secure and efficient manner.

The group will recommend measures to ensure that regulations, standards and practices of card issuers are in alignment with the best customer practices.

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