RBI Rule: Is the bank reluctant to close your credit card? Please explain this RBI rule..

Many people accumulate multiple credit cards over time. If a card isn't being used and also incurs annual fees, closing it is beneficial for your budget. On the one hand, you're not reaping the rewards of that card, and on the other, you're incurring unnecessary fees. In some cases, banks delay closing credit cards, so the RBI has established clear rules for this.

According to Reserve Bank of India guidelines, if a customer requests a card closure, the bank must comply within seven days. Failure to do so will result in a penalty of ₹500 per day. This penalty will be passed directly to the customer, provided there is no outstanding balance on the card. The RBI has established this rule to prevent unnecessary delays from causing inconvenience to the customer.

How to Close Your Credit Card - 5 Easy Steps

1. First, pay the full balance

A credit card can only be closed if there is no outstanding balance. No matter how small the amount, the bank will not close the card until the full payment is cleared.

2. Redeem your reward points
Many people, in their haste to close their cards, forget about their reward points. Redeem them first and avail cashback, vouchers, or products. Points expire after the card is closed.

3. Check Standing Instructions
You may have an auto debit instruction running on your card, such as insurance premiums, OTT subscriptions, monthly app bills, or phone or internet bills. If these are not updated, payments may be stopped after the card is closed, and there is a risk of service being discontinued.

4. Call Bank Customer Care
Now you need to call your bank's customer care team. They may ask:

Reason for closing the card
Your name and verification details
Card number
The bank may also ask you to send an email or share a photo of the card by cutting it.

5. Don't forget to shred the card
The most important step in closing a credit card is to shred it. Cut the card in the middle and at the chip end. Do not throw the uncut card in the dustbin. There is a risk of fraud if it falls into the wrong hands.

Conclusion
Closing a credit card is not a difficult process; you just need to carefully follow a few important steps. The RBI has made this process very easy and secure. If a card is no longer useful to you and has annual fees, closing it is better for your budget and financial health. Closing the card at the right time and in the right manner can help you avoid unnecessary expenses, fraud, and confusion.

PC Social Media