With a view to provide adequate safety parameters for the growth of domestic credit card operations and to protect the banks’ and the customers’ interests alike, the following general guidelines are issued for compliance by all banks:

  a)                 The domestic credit card operations shall be deemed to be a part of bank’s lending activity and as such shall be governed by the rules and regulations relating to the grant of loans and advances.  Accordingly, banks shall monitor the credit card portfolio regularly and ensure to institute proper machinery for speedy recovery of dues and effective follow-up of unpaid dues.

b)                 Terms and conditions regarding the issue and use of the credit cards shall be properly documented in the form of a written contract between the bank and the credit card holders.  These conditions must clearly highlight the cardholder’s liabilities and obligations, eligibility conditions, fees, charges, service fee rate and their method of calculation etc. No charge shall be recoverable from the credit card holders other than agreed to as per the contract.

c)                 Banks shall provide the credit card holders with the statements of account at monthly intervals, unless there has been no transaction or no outstanding balance on the account since last statement.

d)                 Banks shall be liable for all transactions not authorized by the credit card holders after it has been properly served with a notice that the card has been lost/stolen.  However, the bank’s liability shall be limited to those amounts wrongly charged to the credit card holder’s account.

e)                 The banks engaged in domestic credit card business are required to furnish the State Bank of Pakistan with a quarterly report on their domestic credit card operations within 15 days of the close of each quarter.  The banks shall also report to the State Bank of Pakistan cases of frauds/forgeries in credit card operations as and when they occur.

f)                   Any violation or circumvention to the above guidelines shall render the banks and official(s) concerned liable to penal action under the relevant provisions of the Banking Companies Ordinance, 1962.

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