RBI Credit Card Rules: The Reserve Bank of India has made changes to three key regulations concerning banking and personal finance, set to take effect in 2026. These new rules will have a direct effect on people’s credit scores, loan conditions, and bank account activities. The goal of these changes is to enhance transparency in the system, safeguard borrowers, and minimize the chances of fraud.
Before diving into these updates, it’s crucial to grasp what a credit score and a CIBIL score are. These two elements play a significant role in determining your eligibility for a loan and the interest rate you’ll be offered.
So, what exactly are credit scores and CIBIL scores?
A credit score is a three-digit figure that ranges from 300 to 900. It reflects your history of timely payments on loans and credit cards. The higher your score, the more reliable banks view you. In India, the most commonly used score is the CIBIL score, which is produced by TransUnion CIBIL. This score provides a comprehensive overview of all your loans, credit cards, EMI payments, defaults, and how much credit you’re using. Banks and NBFCs give priority to this score when deciding on loan approvals.
Credit scores will now be checked weekly
In the past, credit scores were updated monthly. Under the new regulation, banks and finance companies must refresh credit data four times a month. This means your credit score will now fluctuate almost every week. Timely payments of your EMIs and credit card bills will quickly boost your score. However, if you miss a payment or go over your card limit, your score will take an immediate hit. Thus, maintaining financial discipline is more crucial than ever.
No more prepayment charges on floating rate loans
Starting January 1, 2026, there will be no prepayment or foreclosure fees on floating rate loans. This applies to all types of floating rate loans, including home loans, personal loans, and auto loans. This change will offer significant relief to borrowers, allowing them to pay off their loans early without incurring penalties or switch to another bank if they find a better interest rate. This will enhance customer flexibility and ramp up competition among banks.
If a bank account remains untransferred for twelve months, it will be considered inactive. If there is no activity for two years, it will be placed in the dormant category. Under the new rules, banks will be required to regularly check such accounts, update KYC, and provide customer notices. This is intended to reduce the risk of fraud, identity misuse, and money laundering. Customers are advised to periodically make small transactions in their old accounts to keep them active.
