Bank delays credit card closure? Know your rights — Here’s how to claim ₹500/day compensation
Closing an unused credit card should take minutes, but somehow, cardholders find themselves trapped in an endless loop of unhelpful customer service bots, persistent retention calls, and unfulfilled cancellation tickets.
Many simply give up, assuming an inactive card tucked away in a drawer is harmless. However, ignoring a languishing account can lead to surprise annual fees, sudden drops in credit score, and administrative headaches.
Under the Reserve Bank of India’s (RBI) guidelines, banks face strict deadlines to act, and failing to do so can result in substantial penalties paid directly to the consumer.
The severity of the mandate was realised recently when a bank was directed to compensate a cardholder ₹3.21 lakh after sitting on an account closure request for months.
The customer had cleared all outstanding dues and formally submitted a cancellation request. Despite multiple follow-ups, the bank failed to close the account, allowing the issue to fester for hundreds of days.
The compensation was calculated strictly using the RBI’s mandated formula: a statutory penalty of ₹500 per day of delay, paid to the customer until the card was formally terminated.
Therefore, for a consumer, knowing the rule helps turn a prolonged grievance into an enforceable claim against the lender.
What are the RBI rules for closing a credit card?
Under the RBI’s Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022, the central bank laid down clear operational guardrails to stop banks from stalling account closures:
How to claim compensation?
If you are looking to close a credit card, following a disciplined paper trail ensures you remain legally protected:
