When I went to take a housing loan, I was told my name is listed as a defaulter in the Credit Information Bureau (Cibil). When I got the copy of my records, I realised it is an eight-year-old credit card case. When I approached the issuer and asked to settle and close it, I was told to pay the accumulated interest or they will not take my name off Cibil. My default amount was meagre, Rs 4,000–5,000. I am asked to pay around eight times of that amount. What should I do?
Please write to the nodal officer of the bank, explaining the circumstances under which the amount remained unpaid There is no way except to settle the amount amicably; the banker knows now that you will definitely pay, as you are in need of a better credit report . You may request the banker to waive the interest, which may have been worked out at a very high rate, as credit card overdues are charged at rates varying between 42-49 per cent, depending on the terms of the credit issuer. And for waiver of charges, if any. You can ask for the details from the card issuer.
Thereafter, you may yourself offer a reasonable amount for settlement. Please do get a letter from the card issuer that after payment of an agreed amount, the issuer will take steps to get your name deleted from the defaulters’ list of Cibil.
Please note that the credit history will continue to show that you had defaulted but also that you are no more a defaulter. Perhaps you may have to explain these facts to the banker when you approach for a housing loan.
I had a consumer durable loan two years earlier, and my payments were deducted automatically from my bank account. I had paid one equated monthly installment (EMI) late, as my due date was on Sunday and the lender had sent the request to my bank a day in advance. This Diwali, when I tried to take a loan from the same lender, I discovered the lender had kept my account open, as I had not paid a fine of Rs 100 for missing my EMI. More than a year earlier I had tried a couple of times to contact them for a letter stating that my loan is paid but its helpline was not down for many days. It has become a prestige issue for me, as I was never contacted for this fine. What can I do? Will I be reported as a defaulter?
In all probability, the bank may not have reported your name to Cibil as a defaulter, as only Rs 100 only is outstanding and it may be on account of charges and not EMI. You may write to the bank to find out what this debit represents.
By banking practice, banks can and will recover the dues on the previous day if the due date happens to be a Sunday or a public holiday declared under the Negotiable Instruments Act. If the amount represents charges levied by the bank, no separate notice will be given, as these are made known to the client at the time of sanction of loan. Additionally, guidelines have been given to banks by RBI to display the rate of interest and charges levied on their respective websites.
You may however contact the bank authorities and find out. If there is no response, you could take up the matter with the nodal officer of the bank. For this, visit the website of the bank concerned and/or IBA website.
Vinod Kulkarni is the chief counsellor, Abhay Credit Counselling Services.
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