Late payment of credit cards to be fined only 3 days after due date
Posted on: 17/Jul/2015 11:52:24 AM
The Reserve Bank of India (RBI) has said that credit card companies can levy fines only when the credit card holder has failed to pay three days after the due date. It has also directed banks to report defaults to credit companies like CIBIL only if the amount has not been paid three days after the due date. The new initiative will give the card holder time to pay in case of a bank holiday, or for any other reason.
The RBI issued a circular to all banks. The circular said, ‘In order to bring in greater credit discipline as also to provide operational flexibility to credit card issuers, `past due` status of a credit card account for classifying bad loans would be reckoned from the payment due date mentioned in the monthly credit card statement. Consequently, in case of banks, a credit card account will be treated as non-performing asset if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned in the statement... However, banks shall report a credit card account as `past due` to credit information companies (CICs) or levy penal charges, viz. late payment charges only when a credit card account remains `past due` for more than three days. The number of `days past due` and late payment charges shall, however, be computed from the payment due date mentioned in the credit card statement.’
