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Saturday, 2 March 2013

Capping on the interests charged by the banks on overdue amounts

Most indian banks charge heavily on overdue amounts with credit cards. Charges include late charges, bounce charges, finance chages, fees etc and what not. Even the customer is unaware what are the charges he is paying on his credit card account. Ofcourse, holding a credit card itself is a huge liability, while people are intructed to avoid using credit cards as it is injurious to health like smoking or like any alcohol consumption.

It is often seen and observed with most credit card complaints, that the banks are charging indefinitely on the overdue amounts. If the customer defaults on paying a due amount of Rs 10000, and does not pay off for 6 months, he will be liable to pay almost 30-40,000 or may be more as per bank's policies on penalties.

Shouldn't there be a cap on the charges levied by the bank? Agreed the customer is at fault for not having paid the borrowed due amount to the bank, but there has to be some cap on the charges by the bank. Bank cannot just keep charging 3-4-5 times of the borrowed amount??

Why don't the Reserve Bank take action to control this? Customers need not suffer pain to this extent, this is certainly no justice. Customer as any individual has rights and he should be paid due respect for his rights.
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