Can NBFC issue credit card?

Recently, I read an article about NBFC credit cards. It said that NBFCs cannot operate in the credit card industry or issue credit cards without the Reserve Bank of India's consent. I am here to guide you more about the NBFC credit card.

What is the credit card NBFC concept?

Regional rural banks can offer credit cards in cooperation with their partner bank or other banks, according to the RBI. Additionally, according to certain restrictions, the central banking system (CBS) allowed scheduled urban cooperative banks (UCBs). They must have a minimum net worth of Rs.100 crore to offer credit cards. Now you know can NBFC issue credit card.

A registration certificate is required for businesses. Any financing company, even one that does not accept deposits, will need to have an earnings fund of Rs 100 crore. It must be before it can enter the credit card market. While revising the central order on credit and debit cards, the Reserve Bank stated an important thing. It is that the NBFCs must not provide debit cards, credit cards, card services, or related items without first taking proper authorisation from the Reserve Bank.

What requirements must card providers fulfil for their customers?

• Card-issuing companies must include a one-page basic information sheet with the application for credit cards. 

• It must explain the card's key features, including the interest rate and total cost of charges. 

• In the event that a credit card application is denied, the card-issuing company must provide the particular reasons why in writing.

• It is completely forbidden to provide a customer with an unauthorised card or an unauthorised update. 

• If an uninvited card is approved or an original card is updated and enabled without the user's full consent and the user is charged for it. The card issuer must immediately restore the fees and also pay the user a penalty. 

• It is equal to two times the amount of the reversed fees. 

• If a loss results from the misuse of one of these uninvited cards, the card provider alone shall bear the consequences. It does not have anything to do with the user whose identity the card was issued.

This is all about the concept of the NBFC credit card.