RBI modifies norms on general credit card scheme

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RBI modifies norms on general credit card scheme
In a bid to increase the flow of credit to individuals for entrepreneurial activity in non-farm sector, the Reserve Bank today said such credits should be extended through General Credit Cards scheme under the Financial Inclusion Plans (FIPs).

"Any other credit card (such as Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit Card, and Weaver's Credit Card, etc) in existence and catering to the non-farm entrepreneurial credit needs of individuals should be included for reporting of credit extended through general credit cards (GCC), under the Financial Inclusion Plans (FIP). As the GCC is intended to cover all entrepreneurial credit, consumption credit extended to individuals should not be reported under GCC," RBI said in a notification to banks

Further, the RBI said that, "there will be no ceiling on the loan amount as long as the loan is for the purpose of non-farm entrepreneurial activity and is otherwise eligible for classification as priority sector."

The limits should be fixed on the basis of risk assessment on a case to case basis, it said. As the GCC is intended to cover all entrepreneurial credit, consumption credit extended to individuals should not be reported under GCC," RBI said in a notification to banks.

It clarified the issuance of GCC would not prevent banks from issuing any other credit card to their customers for their consumption needs.

Consumption credit provided by banks is to be reported separately under the head of overdraft or consumption credit in the FIP reporting format prescribed by RBI.

Dion Global Solutions Ltd.

Story first published: Tuesday, December 3, 2013, 9:10 [IST]
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