Banks will now be able to charge more late fees from credit card customers, Supreme Court put a stay on NCDRC’s decision – banks may charge credit card holders late fees above 30 percent annual interest supreme court set aside ncdrc decision of 2008
Not good news for credit card customers. Banks will now be able to charge higher late fees from credit card customers. The Supreme Court on December 20 has stayed the 2008 decision of the National Consumer Dispute Redressal Commission (NCDRC). Due to this, such credit card customers will now have to pay higher late fees, who do not pay the entire bill till the last date of payment. Let us know about this in detail.
What did the Supreme Court say?
The Supreme Court gave an order in this regard on 20 December. A bench led by Supreme Court judges Justice Bela Trivedi and Satish Chandra Sharma Standard Chartered Bank, Citibank, HSBC Including the petitions of many big banks were accepted. The bench said that the decision of NCDRC in this matter is stayed. NCDRC had given its verdict in this case on July 7, 2008.
What decision did NCDRC give in 2008?
NCDRC, in its 2008 decision, had banned charging credit card customers with an interest rate of more than 30 per cent per annum who did not pay the full bill by the due date. Then he had said that even after deregulation in India, the benchmark lending rates of many banks are between 10-15.50 percent. In such a situation, the argument that banks can charge 36-49 percent interest rate is not correct.
On what basis did NCDRC give the decision?
NCDRC had also said that charging such high interest from customers comes under unfair trade practices, because considering the bargaining position of banks and credit cardholders, it seems that customers have no reason to not accept the credit card facility. Except there is no other option. He also said that converting a person into a credit card customer is part of the banks’ marketing efforts.
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How much interest is there on credit cards in other countries?
The Commission then compared the interest rates charged on credit cards in countries like America, United Kingdom and Australia. He had found that interest rates on credit cards in America and United Kingdom range between 9.99 to 17.99 percent. In Australia it is between 18 to 24 percent.