Credit Cards in India: What the RBI Rulebook Actually Gives You

India regulates credit cards more precisely than almost any market in this series. The Reserve Bank of India does not write principles and leave banks to interpret them — it writes a rupee figure for a late account closure, a day count before you can be called past due, and the exact sentence that must appear on your statement. Very little of that reaches English-language guides, which tend to describe the Indian card market as though it were unregulated and expensive.

It is expensive. It is not unregulated. This piece works from the RBI's own Master Directions, from the credit bureaus' published material, and from banks' live fee schedules.

Five corrections before anything else

Each is worked through below.

Where the rules actually live

Two instruments govern almost everything a cardholder cares about.

The first is the Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022, which covers issuance, billing, interest, closure and default reporting. The second is the Master Direction – Reserve Bank of India (Credit Information Reporting) Directions, 2025, issued on 6 January 2025, which governs the bureaus.

Between them they are unusually enforceable. Most of the provisions below carry a number rather than a standard.

What the rulebook gives you, in rupees and days

These are rights, not courtesies. They are worth knowing because the remedy is specific enough to ask for by name.

• A slow closure is compensated. Any request to close a credit card must be honoured within seven working days. Failure to do so "shall result in a penalty of ₹500 per calendar day of delay payable to the cardholder, till the closure of the account", provided nothing is outstanding (clause 8(a)).
• An unsolicited card is compensated at double. Issuing or upgrading a card without consent is "strictly prohibited"; where it happens the issuer must reverse the charges and "pay a penalty without demur to the recipient amounting to twice the value of the charges reversed" (clause 6(a)(iv)).
• An unactivated card cannot quietly become live. If a card has not been activated for more than 30 days from issuance, the issuer must seek OTP-based consent from the cardholder before activating it (clause 6(a)(vi)).
• Three days, not one. An account may be reported as past due to a credit information company, and penal charges levied, only when it "remains past due for more than three days". The issuer must also tell you before it reports a default.
• A settlement must be cleared from your file. Once dues are settled after a default has been reported, the issuer must update the bureau within 30 days.
• A disputed bill has a deadline. Where a cardholder protests a bill, the issuer must provide an explanation, with documentary evidence where applicable, "within a maximum period of 30 days from the date of complaint" (clause 10(b)).
• Your limit cannot be raised unilaterally. Issuers "shall not unilaterally upgrade credit cards and enhance credit limits", and explicit consent is required for any change in terms (clause 11(b)).
• Sales calls have hours. Representatives may contact customers only between 10:00 and 19:00, and a direct sales agent's role is limited to soliciting and servicing — the decision to issue stays with the bank.

The rate is not capped, and the ceiling is the bank's own

This is the most consequential correction, because it is the one that costs money.

The RBI requires that interest "shall be justifiable having regard to the cost incurred and the extent of return that could be reasonably expected by the card-issuer", and that each issuer "prescribe an interest rate ceiling in line with other unsecured loans, including processing and other charges" as part of its board-approved policy. That is a governance requirement, not a price control. The bank sets the ceiling; the regulator requires only that a ceiling exist, be approved at board level, and be published.

Three related rules do real work, though.

• APR must be quoted for five separate situations — retail purchases, balance transfer, cash advances, non-payment of the minimum amount due, and late payment (clause 9(b)(i)). A single headline rate is not compliant disclosure, and a card that shows you one number is showing you the least useful one.
• Unpaid charges cannot be compounded. "The unpaid charges/levies/taxes shall not be capitalized for charging/compounding of interest" (clause 9(b)(ii)). Your GST and your late fee do not themselves start earning interest.
• Interest applies to the adjusted balance only — "levied only on the outstanding amount, adjusted for payments/refunds/reversed transactions".

There is also a mandatory warning, in prescribed words, on every statement: "Making only the minimum payment every month would result in the repayment stretching over months / years with consequential compounded interest payment on your outstanding balance" (clause 9(b)(iii)). And you are entitled to time — issuers must ensure the customer has "at least one fortnight" to pay before interest starts running.

Read those together and the shape of an Indian credit card is clear enough. It is a well-governed payment instrument and an expensive borrowing instrument. Clear it in full and the regulation is generous. Revolve on it and no rule protects you from the rate.

Starting from NA or NH

If you are new to credit in India — an arrival, a graduate, or someone who has simply never borrowed — your file does not read bad. It reads absent.

CIBIL's own explanation puts the score on a 300 to 900 scale and states that a new-to-credit consumer "may not have enough information or credit history to generate a score", and so receives NA or NH — Not Available, or No History. The same verdict appears where there has been no credit activity for a couple of years, or where every card held is an add-on card carrying no exposure of its own.

Four things about the Indian system are worth knowing while that file forms.

There are four bureaus, not one. CIBIL is the best known, and in India the word is used almost as a synonym for a credit score, but the RBI registers four credit information companies. A lender may pull any of them, and they will not agree with each other.

Each owes you a free full report every year. The 2025 Master Direction requires that individuals receive "one free full credit report (FFCR) including credit score, once, at any time, during a year (January – December)". That entitlement is per bureau rather than one in total, which is worth using precisely because the four files differ.

Your file updates fortnightly. Since the 2025 Directions, credit institutions must submit data "on a fortnightly basis (i.e., as on 15th and last day of the respective month)", within seven calendar days of each reporting date. That sets the practical floor on how fast good behaviour shows up: roughly a fortnight, not a day, and not a quarter.

A stale error is compensated. Where a complaint about credit information remains unresolved beyond 30 calendar days from filing, the complainant "shall be entitled to a compensation of ₹100 per calendar day". The 30 days is split — 21 days for the lender to send the correction, the balance for the bureau to act on it. Issuers must also send an SMS or email alert when they report a default or days-past-due against you, so the first you hear of a problem should never be a rejected application.

The general version of this problem, and what to do about it, is covered in why your credit history stops at the border and how to build credit from scratch.

The tax question, and the one number we will not print

This is where Indian card content is least reliable, and where the honest answer has a gap in it.

The mechanism is the Liberalised Remittance Scheme. Under LRS, "all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March)". PAN is mandatory for all LRS transactions. The scheme "is not available to corporates, partnership firms, HUF, Trusts etc.", and there is no restriction on how often you remit inside the annual ceiling.

Tax Collected at Source attaches to remittances made under LRS. So the question that decides your exposure is not how much did I spend abroad. It is which instrument did I spend it on.

• A forex card or an international debit card draws down your LRS allowance. Banks aggregate this across products and collect TCS accordingly.
• A credit card used while abroad sat outside LRS for two decades, under Rule 7 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, which disapplied the ordinary limits for "the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India".

Rule 7 was omitted by notification G.S.R. 369(E) dated 16 May 2023, which would have pulled card spending inside LRS. That change was then not brought into effect: the government stated that transactions through international credit cards while overseas would not be counted as LRS and would not be subject to TCS, pending further notification. Banks have continued to operate on that basis — ICICI Bank's own international transactions page sets out its mark-up in detail and mentions neither TCS nor LRS.

Here is the gap, stated plainly. The threshold and the rate for TCS live in the Finance Act, not in any bank's policy, and both have been amended more than once since 2023 — the threshold most recently in the 2025 Budget. We could not verify the current figure against a primary government source for this edition, and we will not print a number we cannot stand behind. Confirm it with your bank or a chartered accountant before you travel, and treat any figure you find elsewhere, however confidently quoted, as needing the same check.

What does not move is the structure: the instrument decides the treatment. A credit card and a forex card are not interchangeable for tax purposes even when the spending is identical.

What the mark-up actually costs

Published Indian mark-ups are among the highest in this series, and the arithmetic is worse than the headline.

ICICI Bank publishes a "Forex Markup fee of 3.5% + Goods and Services Tax (GST)" as its standard, with the conversion itself made "at the rates provided by Visa, Mastercard or Amex, as the case may be, on the settlement date, increased by a Currency Conversion Factor assessment (currently 3.50%)". Specific cards in the same range carry far lower rates: 2% across the Emeralde cards, 1.49% on Times Black, and 0.99% on the MakeMyTrip co-brand.

The GST matters. A 3.5% fee is not a 3.5% cost once tax is charged on the fee, and the difference accumulates quietly across a trip rather than appearing as a single visible line. This is the same charge stack described in the 3% tax your card charges abroad, with a domestic consumption tax layered on top of it.

Two practical consequences follow. First, the mark-up is a product-level number, not a market-level one — the spread between 0.99% and 3.5% on cards from a single bank is wider than the difference between most countries in this series, so which card you carry matters more than which country you are standing in. Second, always decline dynamic currency conversion; ICICI advises the same on its own page. Being billed in rupees at a foreign terminal means the merchant's processor set the rate, and it will not beat the network's.

UPI is the other half of the system

A card is not the primary payment instrument in India, and any guide that treats it as one will mislead you about daily life.

The relevant crossover is RuPay credit card on UPI, run by NPCI. A RuPay credit card can be linked to a UPI app and spent by QR code at merchants who have never operated a card terminal. NPCI states that customers "shall not be charged for linking or carrying out any transactions from the linked credit card", though a surcharge applies at certain merchant categories such as fuel. Small offline merchants are not charged on transactions up to ₹2,000. The per-day ceiling is the UPI limit rather than a card-specific one, subject of course to the credit available on the card.

The practical point when choosing a card in India: the network on the front changes where it can be spent, not merely what it costs. A Visa or Mastercard credit card is a card. A RuPay credit card is a card and a UPI instrument.

Once you already hold a card

Everything above concerns getting into the system. The rewards question only becomes real afterwards — which is also, precisely, where the Indian market gets interesting, because issuers here compete on reward structure far more than on rate.

One current example of how far that goes: the Uni GoldX card pays rewards in 24K digital gold rather than points, cashback or miles, and carries the marks of Yes Bank and Bank of Baroda on its own application page. Its published terms are a lifetime-free card — no joining fee, no annual fee, no minimum spend — with a fuel surcharge waiver of up to ₹500 per billing cycle.

State the eligibility honestly, because it is the opposite of a starter card. The programme's own criteria filter for applicants who already hold a credit card, active or inactive, and who clear a bureau score above 720; the application collects PAN and serves a defined set of Indian pincodes. If your file currently reads NA or NH, this is not the card that changes that — it is one to revisit after the fortnightly reporting cycle has given you a few months of history.

And a warning that applies to any gold-denominated reward rather than to this card in particular: rewards paid in a commodity are a price exposure, not a fixed rate. That can beat cashback and it can lose to it. Judge it as an allocation decision, not as a headline percentage.

Holding money across currencies

If your income or savings are not in rupees, the conversion problem is separate from the credit problem and worth solving first, because it does not require a credit file at all.

A Wise multi-currency account holds and converts at a disclosed mark-up and lets you hold rupees directly. For business or freelance income billed across several countries, Airwallex does the same at company level. Our multi-currency account versus travel credit card comparison sets out where each fits, and how to set up a Wise multi-currency card walks the mechanics.

The limits, stated plainly. These are stored-balance products, not credit. They build no Indian credit record, they are not reported to the four bureaus, and they will not move you from NA to a score. Nor do they give you a domestic account's relationship with UPI. They solve conversion while you solve access — which, given the mark-ups in the section above, is a reasonable order to solve things in.

The Bottom Line

India gives cardholders more enforceable rights than most markets and prices credit more expensively than most markets, and both facts sit in the same rulebook.

Use the rights, because each one carries a number you can quote: seven working days and ₹500 a day on a closure, double the charges on a card you never asked for, 30 days on a disputed bill, ₹100 a day on a credit-file error left unfixed past a month, and more than three days before anything can be called past due.

Do not expect the rate to be among them. There is no cap — only a requirement that each bank set and publish its own. Treat an Indian credit card as a payment instrument and clear it in full, exactly as in Brazil, and for the same reason.

If you are new to credit here, the file forms on a fortnightly clock, and you are owed a free full report from each of four bureaus once a calendar year. Pull all four before you apply for anything.

And on foreign spending, let the instrument decide. The card in your pocket, the network on its front and the fee schedule attached to it will change your cost more than the country you are standing in — a point the UAE and Thailand make from the other direction.

This is information, not financial advice, and not tax or legal advice on an individual case. RBI directions, bank pricing and Finance Act thresholds change; the Master Directions linked above are the authoritative source and are amended in place. Verify current terms with the institution, and current tax treatment with a qualified adviser, before acting.