The Central Bank announced the amendment of the credit card instructions

The Central Bank announced the amendment of the credit card instructions

The Central Bank announced the amendment of the credit card instructions: The Central Bank announced the new instructions of the Murabaha credit card. This instruction contains the feedback of banking experts with the aim of facilitating the use of credit cards, removing some ambiguities and adapting it as much as possible to the current conditions and requirements of the country and stimulating demand. The issuance of a triple credit card is one of the new tools of the Central Bank to get out of the recession, which will be implemented from October 1 of this year (up to another 11 days). New credit cards are envisaged to launch a “credit purchase” and are set to replace micro-facilities for the purchase of goods and services.

According to the Central Bank officials, these cards are offered in the form of three designs: “Bronze”, “Silver” and “Gold” and with a credit of 10, 30 and 50 million Tomans, respectively. Of course, in using this tool, the approach of those in charge of the monetary and financial system of the country is not to harm the achievement of reducing inflation. Central bank officials hope that by issuing these cards, which are to be made available to the public, the problem of financing the purchase of goods or providing services to the people will be solved, while creating competition in the money market. According to this approach, the Central Bank Credit Regulations and Supervision Commission, based on the “Amendment of Credit Card Instruction” which was previously communicated to the country’s banking network under the title “Murabaha Credit Card Instruction” in 38 articles and 5 notes, Approved feedback from banks, credit institutions, experts and experts in the field of banking, technology and credit. The purpose of this review is to facilitate the use of credit cards by applicants for facilities from the country’s banking network and also to remove some ambiguities and bring it more in line with the current conditions and requirements of the country on the one hand and government goals and programs to stimulate demand and increase household welfare. Is another.

Some expert analysis has suggested that credit cards, although designed with sound logic in mind, have weaknesses in the executive approach. Some experts evaluated these weaknesses in areas such as accreditation, cash flow management after card issuance, facility ceilings, fixed interest rates, shadow market, and so on. For this reason, they suggested that monetary considerations and validation be taken into account in the issuance of cards. On the other hand, they believe that before the public implementation of the plan, it is better to distribute credit cards as a pilot among the specific target community to reduce the risk of default, as well as the possibility of more monitoring to manage the cash flow created to stimulate demand.

Now, in the next 11 days, the plan to distribute multi-purpose credit cards will be key, the Central Bank has announced the new instructions for the Murabaha credit card. According to the “Credit Card Instruction Amendment”, four changes have been made to the new instruction, which include the following:

1- Possibility of repaying the facilities received with the Murabaha credit card in the form of installment loans with installments of at least 12 to a maximum of 36 months; In addition to excretory credit. 2- Obligation to discount at least 90% of the hidden interest in early installments / installments (in proportion to the remaining time until the maturity of the paid installment / installments), in case of repayment of all or part of the credit card facility by the customer before maturity.

3- Failure to receive interest from the customer in case of agreement between the credit institution and the card acceptor, based on the payment of the acceptor’s claims by the credit institution (due to the customer using the credit card) at the end of the breathing period, provided that the customer owes his debt by the end of the breathing period. To pay. 4- Creating the possibility of depositing money to the credit card by the customer, in order to increase the amount payable in purchases with amounts higher than the ceilings set using the credit card.

Contractual requirements

According to this instruction, the issuance of a credit card is allowed only on the basis of a credit card agreement between the credit institution and the customer. The credit institution is also obliged to include at least the following items in the credit card contract, including the credit limit, type of facility granted (installment loan or installment loan) and its maturity / maturities, how to determine and calculate the interest of Murabaha facility, card validity period, period and How to repay the facility, breathing period, rate and method of calculating the obligation to pay the debt, type and amount of documents, schedule and methods of sending invoices, method of informing the credit institution to the customer when necessary, cardholder notifying the maximum invoice Within three working days after the end of each one-month period, the manner and deadline for protesting the invoice, the manner and time of processing the received objection, the rules related to keeping, using and issuing a duplicate card in case of lack or theft of credit card, the rules related to blocking And the credit card is canceled.

How to issue and renew the card

On the other hand, regarding the requirements for issuing and renewing a credit card, it is emphasized that before issuing or renewing a credit card, the credit institution is obliged to inquire about the non-current debt status and the returned check from the central bank and according to the notification criteria. The Central Bank shall issue or renew a credit card. According to the instructions of the Central Bank, if after the expiration date of the credit card, the customer requests to obtain a credit card again, the credit of the new credit card will be determined without considering the customer’s debt for the previous card and according to the relevant criteria; However, the balance of the new credit card is equal to the difference between the amount of credit of the new credit card and the balance of the customer’s debt for the principle of the facilities granted from the location of the previous card. The credit card has a revolving feature; This means that until the expiration date, it is always valid to the extent of the difference between the amount of the credit limit and the principal of the unsettled facility by the customer. Credit card balance can be used only for granting facilities in the form of Murabaha and other financial transactions such as withdrawals, transfers and withdrawals of fees from the said card are not allowed, however, depositing funds to the credit card is exempt from this article; In this case, the priority is to use the credit card balance to purchase property and services with deposited funds. If the customer owes money to the credit institution for using the credit card, the credit institution can withdraw the funds to settle his debt. Also, according to this instruction, the credit institution can extend the credit card credit period according to the current terms and conditions, according to the customer’s request. In this case, the credit institution is obliged to validate the customer, extend the contract, re-evaluate the documents, etc. before renewal. Credit card renewal is only allowed if the customer has applied for an extension before the expiration date of the credit card to the credit institution.

Credit Card Facility Requirements

According to the Central Bank’s directive, the total debt of the customer for the purchases made during the period in the form of a facility, is granted to the customer in the form of a repayment or installment loan. Maturity of repayment credit facilities at the discretion of the credit institution and in two ways; A) maximum until the end of the breathing period and b) maximum 12 months after the end of the breathing period, but the deadline for repaying the installment loan at the discretion of the credit institution is at least 12 months and maximum 36 months after the end of the breathing period. The interest on the deposit and installment loan facility is calculated based on the interest rate of non-participating contracts approved by the Monetary and Credit Council at the time of using the credit card and based on the time period from the date / dates of use to the maturity of the installment / installment. In any case, the effective interest rate calculated should not exceed the interest rate approved by the Monetary and Credit Council for non-participating contracts. Priority of settlement of all or part of the customer’s debt for various invoices, if not determined by him, is with the invoices issued earlier, if the maturity of the credit facility is beyond the expiration date of the credit card, the repayment period These facilities will continue after the expiration date of the credit card within the framework of current terms and conditions. The directive also stipulates that if the customer does not fulfill its obligations to the credit institution to repay all or part of the facility at the due date / maturities, the credit institution will pay an amount as a liability for late payment of debt, in accordance with the rules and regulations. Requests a notification from the Central Bank, commensurate with the amount and duration of the delay documented in the contract.

Card billing requirements

According to this instruction, requirements have been considered in order to monitor the credit card billing, in this regard, the customer details, credit limit, bill period, total amount of credit can be used and its details by date in the time period of a “The month, the rate and the amount of interest of the granted facility until maturity, the card balance at the beginning and end of the period, the breathing period, the objection period, the method of repaying the bill amount and the customer’s debt balance for previous bills.” Also, according to this instruction, credit institutions are required to send the invoice to the customer at the end of the one-month period in the agreed manner. The first invoice will be sent one month after the credit card is issued. In case of delay in sending the invoice by the credit institution, the delay period will be added to the breathing period. On the other hand, the information related to the invoices should be sent to “Makna” system in accordance with the procedure announced by the Central Bank Payment Systems Department.

.Credit card blocking and cancellation

If the claims of the credit institution are not connected within two months from the due date, the credit institution is obliged to freeze the credit card and suspend the possibility of using the card balance. The credit institution is obliged to announce the level to the customers in the agreed manner. If the claims of the credit institution are not received within 6 months after the maturity, the credit institution is obliged to cancel it. Also, if the credit institution agrees with the customer’s request to remove the blockage or re-grant the canceled credit card due to non-fulfillment of obligations by the customer, unblocking, charging or re-granting the credit card, after full repayment of the due debt, the customer is subject to Two months for a blocked credit card and one year for a credit card have been canceled.

On the other hand, other requirements in this regard indicate that the minimum standards and technical and security specifications of the credit card are in accordance with the rules issued by the Central Bank Payment Systems. The credit institution can also claim amounts from the customer in the form of “Credit Card Issuance and Validation Fee” and “Annual Credit Card Subscription” and “Credit Card Utilization Fee” from the card acceptor in accordance with the rules notified by the Central Bank. Demanding any other form from the customer, except for the cases mentioned in this instruction, is prohibited under any heading. If, according to the agreement between the credit institution and the card acceptor, the acceptor’s claims due to the customer’s use of the credit card are paid at the end of the grace period, provided that the customer pays his debt by the end of the grace period, the credit institution is allowed to use the credit card. Do not receive a profit. Regarding credit cards that have been issued and provided to customers before the entry into force of this instruction, the credit institution is obliged to act in accordance with the provisions of the contract and the previous rules until the expiration date of the said card.

According to the Central Bank’s directive, due to the high capacity of the Murabaha contract and credit cards based on this contract, which includes the provision of facilities to provide a wide range of goods and services needed by individuals, these cards are to gradually replace the current network micro-facilities. Banking the country in various fields. In fact, through this new tool, while meeting the financial needs of different segments of society in various fields of goods and services, time-consuming and costly processes of granting short banking facilities and deviations in the use of facilities subject to the contract are to be minimized. Also, in order for different classes of society to have credit cards and to properly implement the notification instructions, it is stipulated that each bank and credit institution is only allowed to issue a credit card to applicants, but receiving multiple cards from several banks or credit institutions is subject to Observance of the ceiling of 50 million Tomans for each customer is unrestricted. The Central Bank’s new communiqué to the banking network emphasizes that a copy of the new credit card instruction should be communicated to all relevant units of banks and credit institutions and that its proper implementation should be closely and effectively monitored; In such a way that up to the first of October of this year, the supply of Murabaha credit cards in the level of the country’s banking network is possible within the framework of the new instructions.

.