Warns of monetary penalty for violating norms
In another move to nudge banks into becoming more customer-friendly, the Reserve Bank of India (RBI) has asked them to reduce the number of complaints related to credit cards.
At a time the number of credit cards in circulation is starting to rise again, RBI today said the offices of the banking ombudsmen continued to receive numerous complaints from credit card holders. RBI has said that penal action, including a monetary penalty, may be taken if banks fail to follow the guidelines on credit card operations.
The complaints received are regarding excessive charges, issuance of unsolicited credit cards, unsolicited add-on insurance policies and recovery of premium charges, charging of annual fee in spite of the customer being told that the card is free, billing, offensive calls and poor response from call centres, among others.
RBI also said that banks should prescribe a ceiling rate of interest for credit cards on the lines of the ceiling rate (including processing and other charges) for small value personal loans.
“The fact that a higher interest rate is being charged to the card-holder on account of his payment/default history should be made known to the card-holder,” said the central bank.
More From This Section
Credit cards issuances, which fell for 18 consecutive months till March, rose about a million in April to 19.29 million.
In the last financial year, 6.4 million cards were culled. The country’s credit card number fell to 18.28 million as on March 31, from a peak of 28.3 million in April 2008, according to RBI data.
HDFC Bank, which had a credit card base of 4.45 million on March 31, is issuing 80,000-90,000 new cards a month, while SBI Cards is adding about 20,000 cards a month.