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Court seeks RBI response on credit card interest rate

The SC seeks a response from the RBI on several petitions filed by multinational banks challenging the order of National Consumer Disputes Redressal Commission restraining banks from charging over 30 per cent annum interest from credit card holders for delayed payment, reports Bhadra Sinha.

delhi Updated: Sep 09, 2008 01:17 IST
Bhadra Sinha
Bhadra Sinha
Hindustan Times
Hindustantimes
         

The Supreme Court on Monday sought a response from the Reserve Bank of India (RBI) on several petitions filed by multinational banks challenging the order of National Consumer Disputes Redressal Commission restraining banks from charging over 30 per cent annum interest from credit card holders for delayed payment.

Admitting the bunch of petitions, a bench headed by Justice B N Aggarwal, however, refused to stay the Commission’s order. This means the banks will have to comply with the guidelines laid down by the national commission until Supreme Court adjudicates the dispute.

The banks that have approached the apex court are Hongkong Shanghai and Banking Corporation (HSBC), American Express Bank, Standard Chartered and Citibank. The court also admitted an intervention application filed by the Indian Banks Association comprising PSU banks.

Condemning the Commission’s order the banks claim ceiling on the rates of interest on the credit card payment is contrary to RBI policy.