In an attempt to help the credit card holders, Reserve Bank has made it clear that the banks will have to pay a penalty for harassing customers over misuse of unsolicited cards.    

The banking regulator in its latest stringent guidelines has said if a customer is billed for unsolicited card, which is issued and activated without his consent, the card issuing bank shall not only reverse the charges forthwith (on misuse of unsolicited cards) but also pay a penalty without demur to the recipient amounting to twice the value of charges reversed.

In addition, the victimized person who received the unsolicited card can also approach the banking ombudsman, which would determine the amount of compensation payable by the bank to the recipient for harassment, mental anguish, expenses incurred and loss of time.     

It further clarified that the person in whose name unsolicited card has been issued will not be responsible for any loss arising from its misuse by unauthorized person.     

"Any loss rising out of misuse of unsolicited cards will be the responsibility of the card issuing bank only" the apex bank guidelines said.           

In order to prevent misuse of lost and stolen card, the RBI has asked banks to issue signature-laminated cards with photograph and pin number. RBI has also asked banks to monthly bills in time and give customers at least 15 days notice to clear their dues.

While on interest rates, the RBI wants banks to set ceiling including processing fees but has not specified any limit.