Rajiv Malhotra regrets being a Citibank cardholder. A Citibank card customer for a decade, Malhotra was checking out from his hotel during a recent visit to China when he found that his cards had been blocked with no intimation for no fault of his.
The stranded business consultant had cancel his onward flight and hotel reservations, and found that his card was blocked because of a bounced cheque on outstanding dues which was traced to a scanning error at IDBI bank, from whose account held by Malhotra’s wife the cheque had been drawn.
Malhotra had to cancel his onward flight tickets and onward hotel reservations. The cheque had been issued much before the due date.
The customer moved the District Consumer Redressal Forum alleging harassment and was awarded over Rs 2 lakh as compensation on March 26 through order number DF (ND) 1091-1094, (Copy of the court order is in possession of the Hindustan Times).
However ,the bank has not paid the compensation yet. Malhotra is planning to move a higher court. Citibank did not respond to HT’s queries on the issue.
Customers say the bank has reduced credit limits of individuals without any prior information fearing repayment problems amid the global crisis in the financial sector.
Credit card issuers are said to be taking aggressive steps to curb defaults. “There is no denying that the credit card industry is going through a tough period with rising non performing asset level but they cannot act irrationally,” said a senior executive of a foreign bank, who did not wish to be identified.
There are about 30 million credit card holders in India. As per estimates the total outstanding on credit cards is around Rs 22,000 –24,000 crore. Bankers say the default rate, which was 6 per cent three years ago, has climbed to 9 per cent.