The Reserve Bank of India has tightened credit card norms, introducing a three-day window before delayed payments are classified as overdue or attract penalties. The move, part of RBI's updated Credit Cards and Debit Cards: Issuance and Conduct Directions, 2026, aims to standardise how issuers report and charge customers.
Under the revised rules, a credit card account can only be tagged as “past due” if payment remains unpaid for more than three days after the due date. The same threshold now applies to levying late payment charges and related penalties.
The amendment also changes how late fees are calculated. Issuers can now apply penalties only on the outstanding amount after the due date, instead of the total billed amount. However, the regulator has clarified that the counting of “days past due” will still begin from the original due date mentioned in the statement. In effect, while penalties are delayed by three days, the clock on delays continues to tick from day one.
What Does This Mean For Cardholders?
For users, the change offers a limited cushion. Missing a due date won't immediately trigger late fees or impact credit reporting, provided the payment is made within three days.
That said, the due date itself remains unchanged. Interest charges and billing cycles are unaffected, and any delay beyond the due date is still recorded internally. The relief is therefore more about timing of penalties rather than a relaxation of repayment discipline.
The RBI's move is part of a broader effort to align credit card practices with wider norms on asset classification and income recognition. By linking penalties to actual outstanding balances, the regulator is also attempting to make charges more proportionate. Different issuers have historically followed varying practices on reporting delays and levying fees, often leading to confusion among customers.
The revised rules will come into force from April 1, 2027, giving banks and card issuers time to recalibrate systems and disclosures.
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