Big News for Credit Card Users! RBI’s New Rule Will Provide Relief from Credit Card Late Fees

Digital payments and credit card usage are rapidly increasing in India. To protect customers from unnecessary fees, the Reserve Bank of India has clarified and balanced the late fee regulations in 2025. These regulations aim to ensure that Indian card users are not burdened with additional financial burdens and that the fees are fully transparent.

What changes have occurred in the late fee regulations?

According to the new regulations, banks will no longer be able to impose arbitrary late fees. The fees will be determined in proportion to the outstanding amount. This will ensure that customers with lower outstanding balances will not have to pay higher fees. Additionally, there will be at least three days’ extension after payment, during which the late fee will not be charged. This arrangement brings relief to customers who were unable to make payments on time due to technical issues or delays.

Fee Transparency and Advance Notice to Customers

Banks will now provide clear information to customers before imposing any late fees. If the fee is changed, it will be mandatory to provide at least one month’s notice. This will enable customers to better plan their spending and payments. This rule is considered a major step towards increasing trust in the banking system.

Online security further strengthened

Two-factor authentication has been made mandatory to make online transactions secure. This will help reduce card fraud and unauthorized transactions. This step is considered extremely important given the increasing digital payment habits.

Customers advised to maintain payment discipline

Despite the new rules, customers are advised to regularly check their bills. Making minimum or full payments on time is the safest way. Using the auto-payment feature can completely avoid late fees and improve credit scores.

These changes will benefit customers

The new rules are expected to provide relief to millions of card users. Customers will no longer have to pay unnecessary penalties, and the banking process will be more transparent. This will help customers control their spending and maintain financial discipline.