In a bid to discourage non-serious applicants, IDFC First Bank has started charging membership fees in advance before sending out its Mayura and Ashva credit cards. “Initial payment of membership fee + GST ​​required to send a metal credit card. The fee is non-refundable,” IDFC First Bank said.

Although membership fees are ₹2999 plus GST (Goods and Services Tax) for Ashva Credit Card is ₹5999 plus GST i.e. 18% for Mayura credit card.

RBI Guidelines

While the RBI (Reserve Bank of India) guidelines clearly state that charges can be levied only when the credit card account is activated, IDFC First Bank has ensured not to violate them by allowing activation of their credit cards online before sending the physical card. to customers.

“The customer can activate the card themselves on the bank portal. Cards can be activated before the physical card is sent. Only if the card is activated by paying for membership costsit would be sent to the customer,” said people familiar with IDFC’s updated card activation process.

“The bank has a digital application process, based on OTP (one-time password). Through this, the consent of the applicant is obtained. Only when the process is successfully completed is the card issued. Explicit customer consent is obtained regarding the initial payment of membership fees upon submission of the application,” they said.

The conditions for obtaining the card are clearly indicated in the application process. Since consent is obtained, after which the credit card account is activated, the process is fully compliant with RBI’s guidelines on issuance of credit cards, the people said.

“Consent for cards issued or other products/services offered with the card should be explicit and should not be implied,” RBI said in its main circular on credit cards. “In other words, the written consent of the applicant is required before issuing a credit card. Alternatively, card issuers can use other digital modes with multi-factor authentication to obtain explicit customer consent,” the apex bank said.

IDFC’s move follows recent complaints about credit cards not being activated after receiving the physical map. Besides, RBI said that banks cannot charge membership fees before activation of the credit card.

Card issuers usually ask for consent based on OTP if customers do not activate the credit card for more than 30 days from the date of issue. “If the card is not activated by the cardholder for more than 30 days from the date of issue, card issuers must request consent based on a one-time password (OTP) ” RBI said.

But since customers simply receive the card without activating it, card-issuing banks now ask for consent before issuing the card. “If the cardholder does not provide consent, the card issuer must close the credit card account within seven days of requesting consent,” RBI said. Any request to close the credit card must be processed within seven working days if there are no unpaid contributions, it is specified.

Allirajan M is a journalist with over two decades of experience. He has worked with several major media outlets in the country and has written about mutual funds for almost 16 years.