RBI asks banks to monitor end use of funds for biz credit cards
Bank of India (RBI) directed lenders Thursday to establish a mechanism to monitor the end use of funds for business credit cards and prohibited them from sharing customers' data with outsourcing partners.
This is in the context of the RBI clamping down on unregulated co-branded partners working with banks and, in many cases, accessing customer transaction data for their own business purposes.
The amended provision clarifies that late payment charges and other related charges will only be levied on the outstanding amount after the due date, not the total amount due.
The RBI directive, which is part of the master circular on credit cards and debit cards, is to be implemented immediately.
It also stated that 'card-issuers' are responsible for the storage and ownership of card data when sharing it with outsourcing partners.
It also stated that card transaction-related data should be «drawn directly from the card issuer's system in an encrypted form and displayed in the co-branding partner (CBP) platform with robust security.»
The amended circular added that «The information displayed through the CBP's platform shall be visible only to the cardholder and shall neither be accessed nor stored by the CBP.»
The amended provision shortens the timeframe for updating the default status with Credit Information Companies (CICs) from «within 30 days» to «within 30 days from the date of settlement.»
It also emphasizes the importance of transparently following procedures, particularly in cases of pending disputes.
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