Credit Card Closure Refused: Claim Rs 500 a Day Penalty 2026

If your bank keeps your credit card open after a valid closure request, RBI rules turn each lost day into money you can claim: the issuer must close the card within 7 working days or pay you Rs 500 for every day of delay, provided you have cleared all dues. Most cardholders never ask for this penalty, so banks quietly pocket the delay. You do not have to.

Quick answer: Once dues are cleared, RBI rules force a credit card issuer to act fast.

  • Card must close within 7 working days of a valid request.
  • Delay costs the issuer ₹500 per day payable to you.
  • No response in 30 days? Escalate to the RBI Ombudsman at https://cms.rbi.org.in.

What this is. A credit card closure refusal is when a bank or card issuer ignores, stalls, or rejects your request to shut a card you no longer want. Under RBI rules the issuer cannot drag its feet or force a branch visit. Delay past 7 working days triggers an automatic daily penalty payable to you, the cardholder.

The governing rule is the Reserve Bank of India Master Direction - Credit Card and Debit Card (Issuance and Conduct) Directions, 2022. It took effect on 1 July 2022 and binds every bank and non-banking card issuer in India. The Reserve Bank of India is the authority that frames and enforces it.

Paragraph 8 of the Master Direction sets out closure rules. Any request to close a credit card must be honoured within 7 working days, subject to the cardholder clearing all dues. If the issuer fails, it must pay ₹500 per day of delay to the cardholder until the account is actually closed, provided there is no outstanding amount in the account. The Master Direction states the penalty is calculated per calendar day, so weekends and holidays count too.

The issuer must let you ask for closure through several channels and cannot insist only on a branch visit. After closing the card, the issuer must notify you by email or SMS.

Step-by-step: how to force closure and claim the penalty

  1. Clear every due first. Pay the full outstanding, including any annual fee or interest, so the account shows a zero balance. The penalty applies only when there is no outstanding.
  2. Send a written closure request through a channel that leaves a record: the dedicated email ID, internet banking message, or the mobile app. Avoid relying only on a phone call.
  3. Note the date and time, and save the acknowledgement, reference number, or ticket the issuer gives you.
  4. Count 7 working days from the day the issuer received your request. Working days exclude Sundays and bank holidays.
  5. If the card is not closed by day 7, write again, quote Paragraph 8 of the RBI Master Direction, and demand ₹500 for each day of delay until closure.
  6. If the issuer ignores or rejects you, wait until 30 days have passed since your first complaint, then file with the RBI Ombudsman at https://cms.rbi.org.in under the Reserve Bank - Integrated Ombudsman Scheme, 2021.
  7. Keep all proof. The Ombudsman can direct the bank to close the card and pay the daily penalty.

Documents and details to keep

  • A copy of your written closure request with date and time
  • The acknowledgement, ticket, or reference number from the issuer
  • Your last statement showing a zero or fully cleared balance
  • Screenshots of app or internet-banking messages and any chat transcripts
  • Email or SMS records of every reply, including any refusal
  • A simple day count from the 8th working day onward to compute the penalty

Common mistakes to avoid

  • Closing the card by phone only, leaving no written proof of the request date
  • Letting a small unpaid charge sit on the account, which lets the bank deny the penalty
  • Accepting a branch-visit demand, which the rules do not require
  • Forgetting to count from when the issuer received the request, not when you posted it
  • Going to the Ombudsman too early; you must wait 30 days after your first complaint
  • Not asking for the ₹500 daily penalty in writing, so the bank never volunteers it

Real-life example

Dr. Shrawan Kumar Pathak, Gorakhpur district, Uttar Pradesh. On 3 February 2026 he cleared his full balance and asked his bank to close a credit card through the mobile app, saving the ticket number. The 7 working days lapsed on 12 February 2026 with the card still active. He wrote again quoting Paragraph 8 of the RBI Master Direction. The bank stalled, so on 6 March 2026, after 30 days, he filed at https://cms.rbi.org.in. The Ombudsman process led the bank to close the card and pay ₹500 for each day of delay from 13 February to closure.

The RTI angle

The Reserve Bank of India is a public authority under the RTI Act, 2005, so you can file an RTI for records and policy, such as circulars on credit card closure or aggregate complaint data. Be clear, though: RTI is not the tool that recovers your ₹500 penalty. The operative remedy is the RBI Ombudsman under the RB-IOS, 2021 via https://cms.rbi.org.in. Use RTI to understand the rules and the regulator, and the Ombudsman to get paid.

You can draft an RTI in minutes with the AI RTI Drafter, and if a public authority stonewalls you, build a first appeal with the First Appeal Builder. 

To,
The Central Public Information Officer
Reserve Bank of India

Subject: Request for information under the RTI Act, 2005

Under Section 6(1) of the RTI Act, 2005, please provide:
1. A copy of the current Master Direction and any amendments governing
   the closure of credit cards, including the 7 working day rule and the
   Rs 500 per day penalty.
2. Any circular or guidance on the channels through which a cardholder may
   request closure.
3. The number of credit card closure related complaints received by the
   RBI Ombudsman in the last financial year, in aggregate.

I request the information under Section 7(1) within 30 days. I enclose the
fee of Rs 10. If any part is held by another authority, please transfer it
under Section 6(3).

If this request is not answered within 30 days, I will file a first appeal
under Section 19(1).

Name:
Address:
Date:

Frequently asked questions

Q. How many days does a bank have to close my credit card?

Seven working days from when the issuer receives a valid closure request, provided you have cleared all dues. This is set in Paragraph 8 of the RBI Master Direction - Credit Card and Debit Card (Issuance and Conduct) Directions, 2022. Working days exclude Sundays and bank holidays.

Q. What penalty does the bank pay if it delays closing my card?

The issuer must pay you ₹500 for every day of delay beyond 7 working days, until the card is actually closed, provided there is no outstanding amount in the account. The penalty is counted per calendar day, so weekends and holidays count too.

Q. Can the bank force me to visit a branch to close my card?

No. The issuer must let you request closure through channels such as a helpline, a dedicated email ID, IVR, a clearly visible link on its website, internet banking, or the mobile app. Insisting only on a branch visit is not allowed under the Master Direction.

Q. Do I get a confirmation after my card is closed?

Yes. After closing the card, the issuer must notify you immediately by email or SMS. Keep that message, since it fixes the closure date and helps you calculate any penalty owed for delay.

Q. What if the bank still ignores me after 7 working days?

Write again quoting Paragraph 8 and demand the ₹500 daily penalty. If the issuer does not resolve your complaint within 30 days or rejects it, file with the RBI Ombudsman under the RB-IOS, 2021 at https://cms.rbi.org.in. The Ombudsman can direct closure and payment.

Q. Will the penalty apply if I still owe money on the card?

No. The ₹500 per day penalty applies only when there is no outstanding amount in the account. Clear every due, including annual fee and interest, before you ask for closure, so the bank cannot use a balance to deny you.

Q. Is an RTI the right way to get my Rs 500 penalty?

No. RTI helps you obtain records and policy from the RBI, which is a public authority under the RTI Act, 2005. The remedy that recovers the penalty is the RBI Ombudsman under the RB-IOS, 2021, not an RTI application.

Q. Does this rule cover NBFC and co-branded credit cards too?

Yes. The Master Direction binds banks and non-banking card issuers operating in India. The 7 working day closure rule and the ₹500 daily penalty apply across these issuers, as long as you have cleared all dues.

Sources

Reader signal

Was this article useful?

Tap once if it helped you. These counters show other citizens which pages are worth reading.

- views