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FAQ on Master Direction (MD) - Credit Card and Debit Card – Issuance and Conduct Directions, 2022
Response: Card issuers are prohibited from issuing unsolicited credit cards and are required to seek prior and explicit consent from the customer before issuing a card. However, if the customer receives an unsolicited card, he/she should refrain from activating or providing consent for activation of card through OTP or any other means. If no consent is received for activating the card, the card-issuer is required to close the credit card account without any cost to the customer within seven working days from the date of seeking confirmation from the customer and shall also intimate the customer that the credit card account has been closed. Subsequent to receiving the intimation from the card-issuer that the card account has been closed, the customer shall destroy the card. Further, the customer may file a complaint with the card-issuer against the issuance of unsolicited card and escalate it to the RBI Ombudsman as per Integrated Ombudsman Scheme (please refer to the response of query 17 below).
Ans. An ATM is a computerised machine that provides customers of banks the facility of accessing their accounts for dispensing cash and to carry out other financial & non-financial transactions without the need to visit the bank branch.
Disclaimer:
These FAQs are for general guidance purpose only. In case of any inconsistency(ies) between FAQ and FEMA, 1999, Rules/Regulations/Directions/Permissions issued thereunder, the latter shall prevail.
Answer: The settlement of International trade through Indian Rupees (INR) is an additional arrangement to the existing system of settlement.
Ans: National Electronic Funds Transfer (NEFT) is a nation-wide centralised payment system owned and operated by the Reserve Bank of India (RBI). The set of procedures to be followed by various stakeholders participating in the system is available on the RBI website under the following link: https://rbi.org.in/documents/87730/39711381/NEFTPROCEDURALJANUARY2024DBA95372B2454F9F8B767824B0B6E86F.pdf.
In terms of Gazette Notification S.O. 1364 (E) dated March 21, 2025, an enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria viz.,
i. a micro enterprise, where the investment in plant and machinery or equipment does not exceed ₹2.5 crore and turnover does not exceed ₹10 crore;
ii. a small enterprise, where the investment in plant and machinery or equipment does not exceed ₹25 crore and turnover does not exceed ₹100 crore; and
iii. a medium enterprise, where the investment in plant and machinery or equipment does not exceed ₹125 crore and turnover does not exceed ₹500 crore.
All such enterprises are required to register online on the Udyam Registration portal and obtain ‘Udyam Registration Certificate’. For Priority Sector Lending (PSL) purposes banks shall be guided by the classification recorded in the Udyam Registration Certificate (URC). (Refer Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017 and circular FIDD.MSME & NFS.BC.No.13/06.02.31/2023-24 dated December 28, 2023)
The Factoring Act, 2011 defines the ‘Factoring Business’ as “the business of acquisition of receivables of assignor by accepting assignment of such receivables or financing, whether by way of making loans or advances or in any other manner against the security interest over any receivables”. However, credit facilities provided by banks in the ordinary course of business against security of receivables and any activity undertaken as a commission agent or otherwise for sale of agricultural produce or goods of any kind whatsoever and related activities are expressly excluded from the definition of Factoring Business. The Factoring Act has laid the basic legal framework for factoring in India.
These FAQs attempt to put in place the common queries that users have on the subject in easy to understand language. However, for conducting a transaction, the Foreign Exchange Management Act, 1999 (FEMA) and the Regulations made or directions issued thereunder may be referred to. The relevant principal regulations are the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015 issued vide Notification No. FEMA 10(R)/2015-RB dated January 21, 2016. The directions issued are consolidated in Part I of the Master Direction No 14 on Deposits and Accounts. Amendments, if any, to the principal regulations are appended.
Answer: Sec 2(v) of the Foreign Exchange Management Act, 1999 (FEMA) defines a person resident in India as:
(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include-
(A) a person who has gone out of India or who stays outside India, in either case-
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for or on taking up employment outside India, or
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for carrying on outside India a business or vocation outside India, or
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for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than-
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for or on taking up employment in India, or
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for carrying on in India a business or vocation in India, or
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for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in India;
Answer: A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India.
Response: No. However, banks should submit to RBI the implementation details including names of the Collection and Purity Testing Centres (CPTCs) and refiners with whom they have entered into tripartite agreement and the branches operating the scheme. Banks should also report the amount of gold mobilised under the scheme by all branches in a consolidated manner on a monthly basis in the prescribed format.
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Page Last Updated on: December 11, 2022
