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RBI tightens norms for credit card billing

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A credit card is a payment card which allows the cardholders to pay for their goods and services few times after they have purchased anything.

In credit card accounts, the amount spent is billed to the card users through a monthly statement with a definite due date for repayment. Customers have the option of either to pay full payment or a fraction of it and roll over the balance to the subsequent month’s billing cycle.

Different companies give their customers different time periods to pay their amount after using their credit card based on the credit card policy taken by the customer.

Now RBI has tightened norms for credit card holders. It has asked banks to levy any late payment penalty on credit card customers or report that credit card account as ‘past due’ to credit information companies, if the payment has been due for more than 3 days.

The number of ‘days past due’ and late payment charges will be computed from payment due date mentioned in the credit card statement.

Also, account corresponding to that credit card holder will be treated as non-performing asset if the ‘minimum amount due’ has not been paid within 90 days from the due date.

A non-performing asset is one when it ceases to generate income for the bank. And in this case, the cardholder’s account will become non-performing i.e. the customer will not be able to credit into or debit from the bank