Banks must keep a check on credit card frauds
In order to curb such malpractices, the rule which should be implemented can be disallowing any withdrawal if limit exceeds even by a single paise/rupee rather than penalising the credit-card holder in such a discretionary manner.
IT IS indeed disheartening that Reserve Bank of India (RBI) as monitoring body has totally failed to control private banks from looting general public through their self-made rules for credit cards. Recently, a credit-card bill was received from HSBC Bank where rupees 551.50 (inclusive of service-charges) were imposed for a petty over-limit of about rupees 50. Likewise, arguments put by banks to have extra-ordinary interest-rate to overcome heavy cost in credit-card operations is in itself confessional for giving banks permission to levy ‘hidden charges’ to fool customers. Banks can instead levy charges on issuing and transactions made through credit-cards.
Even credit-card statements are designed in a manner like ‘Minimum Amount Due’ to fool customers that they put themselves under heavy dose of interest-rate. Banks also resort to malpractice by deliberately not sending credit-cards statements in time, which forces customers to default on payments leading to heavy fines. What's more, any shortfall in payment attracts penalty and interest on complete dues!
RBI should make necessary amendments whereby there may be uniform rules in respect of credit-cards including interest-rate and penalties. Banks may however be at liberty to charge issue and transaction costs to meet operational costs. But in no case, they should be permitted to levy ‘hidden costs’ in form of extra-ordinary interest-rates and uncalled for penalties for their profit-earning.
RBI should make necessary amendments whereby there may be uniform rules in respect of credit-cards including interest-rate and penalties. Banks may however be at liberty to charge issue and transaction costs to meet operational costs. But in no case, they should be permitted to levy ‘hidden costs’ in form of extra-ordinary interest-rates and uncalled for penalties for their profit-earning.
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