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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