The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Small Finance Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025 to establish a comprehensive regulatory framework for the issuance, management, and governance of credit and debit card operations by Small Finance Banks (SFBs). The , issued under Section 35A of the Banking Regulation Act, 1949, aims to ensure responsible lending, transparency in customer dealings, fair billing practices, and stronger consumer protection in the card ecosystem. It mandates SFBs with a minimum net worth of ₹100 crore to undertake card issuance, either independently or in tie-up with other entities, with prior Board approval and adherence to a Board-approved policy covering interest rates, grievance redressal, and co-branding arrangements.
The guidelines comprehensively detail norms for customer acquisition, issuance, activation, and closure of cards. They prohibit unsolicited card issuance and require explicit OTP-based consent for activation, failing which inactivated cards must be closed within seven days. Provisions include penalties for unauthorized issuance, clear communication of the Most Important Terms and Conditions (MITC), transparent disclosure of interest and charges, and half-yearly operational review by the Board’s Audit Committee. The directions also set out strict underwriting standards, requiring independent credit risk assessment, limits based on total exposure, and prohibition of over-limit transactions without explicit cardholder consent.
On pricing and billing, the mandates disclosure of the Annual Percentage Rate (APR), ensures at least a fortnight’s grace period before interest accrual, and prohibits negative amortization or capitalization of unpaid charges. It directs card-issuers to process closure requests within seven working days, credit refunds promptly, and update Credit Information Companies (CICs) accordingly. Cardholders must be clearly warned about the financial impact of paying only the minimum amount due. These directions collectively aim to enhance transparency, customer confidence, and operational discipline in the growing digital credit and payments ecosystem.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/186 DOR.AUT.REC.No.105/24-01-041/2025-26]
