News Business Understanding RBI's New Credit Card Refund Rules

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Understanding RBI's New Credit Card Refund Rules

By Anulekha Ray, ET Online

Last Updated: March 30, 2024, 10:28 AM IST


Recently, the Reserve Bank of India (RBI) made significant amendments to the "Master Direction - Credit Card and Debit Card – Issuance and Conduct Directions, 2022." These changes impact credit card refunds and bill payments. Let's delve into the details.

What Is a Credit Card Refund?

When you make a purchase using your credit card, there might be instances when you need to cancel the transaction or return the item. In such cases, the merchant is obligated to refund the money to you. The timing and process of receiving this refund depend on the merchant's return policy.

Refund Adjustment

Typically, the merchant credits the refund back to your original mode of payment—your credit card. Consequently, the refunded amount is deducted from your existing credit card outstanding balance. This negative credit is reflected in your credit card statement, while your available credit limit increases by the same amount.

Processing Time

Patience is key when awaiting a credit card refund. The process involves credit card networks and intermediaries, which can take several days. The exact duration varies based on the merchant and your credit card issuer, but it generally ranges from five to 14 days.


Understanding these new rules ensures that credit card users are well-informed about refund processes and adjustments. Stay informed and manage your credit card transactions effectively!

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