The Supreme Court (SC) today admitted an appeal against the order of the National Consumer Commission (NCC), which had imposed restriction on charging interest at rates in excess of 30 per cent from the credit card holders.
The Indian Banks Association, Standard Chartered Bank, HSBC and Citibank have already appealed against the order. According to the banks, they were following the guidelines of the Reserve Bank of India, which was the only authority to regulate the fixing of the interest. Therefore, the commission had no jurisdiction to pass an order directly to the banks.
On the contrary, the consumer group ‘Awaz’ argued before a bench headed by Justice B N Agrawal that the commission had failed to notice that the banks were charging more than 90 per cent if one takes into account the interest on default combined with the hidden costs.
The prevailing interest even for unsecured finance fixed under the Money Lenders Act was below 20 per cent, the petitioner argued. Even after deregulation, the benchmark prime lending rate as fixed by the banks is in the range of 10-15.5 per cent even for unsecured finance. The Supreme Court has decided to hear both the appeals together.