In a bid to deter unserious applicants, IDFC First Bank has started charging the application fee upfront before shipping Mayura and Ashva credit cards. “In order to send the metal credit card, advance payment of the membership fee + GST ​​is required. The fee is non-refundable,” said IDFC First Bank.

While the registration fee is ₹2999 plus GST (Goods and Services Tax) for Ashva Credit Card, is ₹5999 plus GST, which is 18%, for Mayura Credit Card.

RBI guidelines

While RBI (Reserve Bank of India) rules clearly state that charges can be levied only when the credit card account is activated, IDFC First Bank has ensured that it does not violate it by allowing its credit cards to be activated online before send the physical card. to customers.

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

“The bank has a digital application process, which is OTP (One Time Password) based. The consent of the applicant is hereby obtained. Only when the process is successfully completed, the card is issued. Explicit consent is taken from the customer regarding advance payment of membership fee during the application,” they said.

The requirements for obtaining the card are clearly stated in the application process. Since consent is taken after which the credit card account is activated, the process is fully in line with RBI guidelines on the issue of credit cards, the people said.

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

IDFC’s move follows recent complaints of non-activation of credit cards after receipt physical card. Incidentally, the RBI has said that banks cannot charge an application fee before the credit card is activated.

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

But given the problems with customers just getting the card and not activating it, issuing banks are now asking 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 seeking consent,” RBI said. Any credit card closure request should be processed within seven business days if there are no outstanding charges, it said.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organizations in the country and has been writing about mutual funds for nearly 16 years.