Good news for all credit card holders .RBI has issued a direction to all Banks regarding late payment charges on credit cards dues on 16.0...
Good news for all credit card holders .RBI has issued a direction to all Banks regarding late payment charges on credit cards dues on 16.07.2015.According to circular bank can charge late payment fees charges only after three days from due date shown in credit card bill.
Its is important to mention here that late fees payment charges varies from bank to bank and type of card you have opted and ranges from Rs 100 to Rs 1000 .Further service tax @ 14 % is also applicable on charges recovered on credit card .Moreover banks are also charging interest on amount not deposited along with "late payment charges " as applicable.
Please note that Interest charges on late payment remain applicable as before and no exemption has been allowed for interest charges.
Further RBI has also directed the banks to report the "past due" status of credit card to credit information companies (like CIBIL) only after three days from due date shown in the credit card statement /Bill.
Complete Circular is given here under for your ready reference
July 16, 2015
All Scheduled Commercial Banks/Non-Banking Financial Companies/Primary (Urban) Co-operative Banks
Prudential Norms on Income Recognition, Asset Classification and
Provisioning pertaining to Advances – Credit Card Accounts
Please refer to circular DBOD.No.BP.BC.78/21.04.048/2013-14 dated December 20, 2013 on the captioned subject.
2. In order to bring in greater credit discipline as also to provide operational flexibility to credit card issuers, it has been decided that, with effect from the date of this circular, ‘past due’ status of a credit card account for the purpose of asset classification 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.
3. However, banks shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz. late payment charges, etc., if any, 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.
Chief General Manager-in-Charge