New Delhi, Sept. 2 -- Closing an unused credit card should take minutes, but somehow, cardholders find themselves trapped in an endless loop of unhelpful customer service bots, persistent retention calls, and unfulfilled cancellation tickets.

Many simply give up, assuming an inactive card tucked away in a drawer is harmless. However, ignoring a languishing account can lead to surprise annual fees, sudden drops in credit score, and administrative headaches.

Under the Reserve Bank of India's (RBI) guidelines, banks face strict deadlines to act, and failing to do so can result in substantial penalties paid directly to the consumer.

The severity of the mandate was realised recently when a bank was directed to compensate a cardholder Rs.3.2...