RBI tightens norms for credit card issuers on minimum dues
RBI SETS NORMS FOR LATE FEE ON CREDIT CARDS:
RBI has told banks that the can charge late fees only in the next billing cycle following a missed payment. At present card issuing banks charge a late fee for any payment made after the due date.
The late fee imposed by card issuers ranges between Rs.100 and Rs.700 depending on the outstanding amount above Rs.20000 most banks charges a late fee of between Rs.600 and Rs.700 .Most utility providers like electricity and telecom companies charges customers if they miss the due date.How ever i the case of credit card payment the issuers charges interest for the delayed payment and in addition to this they charge a late fee payment.
This had led to a lot of heartburn among customers as they ended up paying both late fee and the interest even if they made the payment before the next bill was due.
CEO of SBI confirmed that RBI has asked banks not to impose late charges if the cardholder had paid before the next billing but after the due date .It is possible that the regulator must have felt that since the card holder is not being considered a delinquent until the next bill is unpaid the penalty should not ve charged he added when asked about the rationale .
In December 2013 RBI had directed banks credit card accounts to be treated as delinquent only if the minimum amount due as mentioned in the statement is not paid fully within 90 days from the next statement date .The gap between two statement should not be more than a month.
Some banks took the due date specified in the statement of payment of minimum amount due to determine the overdue status while others used the subsequent billing date to determine the over due status.
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