Axis Bank Issuing Cancellation Notices for Using Personal Credit Cards for Business Expenses

[TechnoFino]

Dear TFC members,

I would like to inform you that Axis Bank has begun sending commercial use notifications to their HNI cardholders as well. As you may already know, Axis Bank has a history of cancelling their customers' cashback cards such as Axis Ace and Axis Flipkart Card if they are used for business purposes.

Recently, Axis Bank has sent suspected commercial use notifications to their HNI cardholders such as Axis Magnus, Axis Reserve, etc. Unfortunately, I have also received a notification from Axis Bank and they are requesting spending justification within the next seven working days.

In case a customer is unable to justify their spending as personal, the bank will close all their credit cards.
During that time frame (Dec 2022 and Jan 2023), all of my spending was personal. I am currently in the process of submitting all the necessary documents to Axis Bank for spending justification.
The primary reason for this post is to advise our members that even if you are using a high-end credit card from a bank, they may still flag your transactions if they are related to business expenses.
If you intend to charge anything other than personal expenses to your personal credit card, please exercise caution.

Edit:- many people are asking for subject line of the email, Here it is- "Commercial Usage on your Axis Bank Credit Card Accounts"

Update - Axis Bank has already sent notifications to more than 200 accounts on March 4, 2023. Now they have sent such a cancellation notice to more than 500 credit card accounts yesterday. and they are also filtering more accounts. (S.N.)

 

[akshayhs]

Simple, you can easily determine our income through CIBIL. A few days ago, a buddy of mine who works for HDFC provided my CIBIL from their system. I was startled to find many facts, including my yearly salary and other details.

This confirms my assumption that banks and lenders see and get access to a different version of our credit reports than what we see.

 

[chiron]

can you share the spending patterns for these cards @TechnoFino ?

 

[AJ-]

Did you get mail or sms? @TechnoFino
please share your spending % on each category.

 

[thanix]

Banks have the cardholder's PAN and ITR. That's good enough to get an idea of the customer's income and all they need to do is to see if the total expenses is above that. Merely crossing it doesn't mean it has to be a business expense, which is why the bank has asked for clarification.

I think this is a good move and all banks should do this in some form or the other.

Now this is news to me that banks have ITR. Unless you provide it explicitly to apply for a credit card or to anyone for any reason, ITR is not available to anyone except to IT department. Please let me know from where you got this information.

 

[vysakh]

Unless you provide it explicitly to apply for a credit card

Yes, isn't it kind of mandatory with almost every bank now? ITR or salary slip? I've seen every bank asking for a monthly/yearly salary while applying for a card.

Since everything is linked to the PAN, I wouldn't be surprised if banks and ITD have some kind of API wherein they can get to see the income with just the PAN. I don't know if such a system exists though.

 

[WhoU]

Now this is news to me that banks have ITR. Unless you provide it explicitly to apply for a credit card or to anyone for any reason, ITR is not available to anyone except to IT department. Please let me know from where you got this information.

Yeah having PAN and access to Cibil is a different thing from having access to ITR. Nobody has access to ITR unless you explicitly share it with them.

 

[WhoU]

Yes, isn't it kind of mandatory with almost every bank now? ITR or salary slip? I've seen every bank asking for a monthly/yearly salary while applying for a card.

Since everything is linked to the PAN, I wouldn't be surprised if banks and ITD have some kind of API wherein they can get to see the income with just the PAN. I don't know if such a system exists though.

No, banks are private entities. Why would government give their data access to any private entity? Think of ITR as not only customer data but also government data.

 

[AsB]

Yes, isn't it kind of mandatory with almost every bank now? ITR or salary slip? I've seen every bank asking for a monthly/yearly salary while applying for a card.

Since everything is linked to the PAN, I wouldn't be surprised if banks and ITD have some kind of API wherein they can get to see the income with just the PAN. I don't know if such a system exists though.

No. Unless there is an extreme requirement, banks cannot simply go through the ITR or payment, and that too, a request must be placed with ITR. That's a long process.
1) There are people who do not fall into ITR criteria, so they dont file their income tax. So, no way of knowing their salaries without payslips.
2) There are people who have less salary but more property / other sources of payments. Even then credit cards are processed based on payslips and limits are decided accordingly.
3) To avoid TDS, banks ask to submit Form 15G or 15H. If they have had such access to ITR, they wouldnt require such a thing.

 

[makagr]

How many people have received the notice? can anybody else confirm.

 

[R!ppEr]

this thread is diverting to a very random discussion with the ITR and whatnot, i think that can be moved to a separate thread itself

 

[Kenu73]

I work for a financial institution and half of the comments here are misinformed, no one can know your earnings with just a PAN / bank statement. That's not how things are determined.

There is a transaction verification team. That sits and monitors transaction, if someone keep on using the wallet. His account can go into review additionally if you are rotating money in a very high margin, like people do for Magnus that can also go for review, lets say you took a card basis ITR of 12 lakh but your monthly spends are crossing that, they can put financial review on the account.

Additionally, these type of reviews happen on large volumes of transaction. Usually no one bothers for amount ranging till 90k- 1kh.

But if you keep on hitting in Lakhs on suspicious merchants or same merchant every other month is when things get messy. There are a lot of other aspects but I can't just share it over internet but small Spenders have nothing to worry about it's only for people hitting lakhs every month and if you get this review and you justify it you are good of years usually

 

[Wealth is my birth right!]

How many people have received the notice? can anybody else confirm.

The initial post owner having 5 cards with axis and got lakhs of edge rewards in a month
For u and me having only 1 magnus and reaching milestone 4 or 5 months in an year we won’t get such notices don’t worry

I work for a financial institution and half of the comments here are misinformed, no one can know your earnings with just a PAN / bank statement. That's not how things are determined.

There is a transaction verification team. That sits and monitors transaction, if someone keep on using the wallet. His account can go into review additionally if you are rotating money in a very high margin, like people do for Magnus that can also go for review, lets say you took a card basis ITR of 12 lakh but your monthly spends are crossing that, they can put financial review on the account.

Additionally, these type of reviews happen on large volumes of transaction. Usually no one bothers for amount ranging till 90k- 1kh.

But if you keep on hitting in Lakhs on suspicious merchants or same merchant every other month is when things get messy. There are a lot of other aspects but I can't just share it over internet but small Spenders have nothing to worry about it's only for people hitting lakhs every month and if you get this review and you justify it you are good of years usually

Exactly I too posted the same essence in different words
Anyway I had some plans to use BharTnxt this month for magnus which i planned to hold as a cautionary note

 

[makagr]

The initial post owner having 5 cards with axis and got lakhs of edge rewards in a month
For u and me having only 1 magnus and reaching milestone 4 or 5 months in an year we won’t get such notices don’t worry

Ok thanks, I have received the Magnus this month only. I was also thinking to use it for business spends in 4/5 months. So that's why worrying.

 

[Wealth is my birth right!]

Ok thanks, I have received the Magnus this month only. I was also thinking to use it for business spends in 4/5 months. So that's why worrying.

Just don’t show spends as single swipe for big amount which catches attention by bank AI
Try using for retail spends like medicine grocery milk etc combined with business spends which will save u

 

[makagr]

Just don’t show spends as single swipe for big amount which catches attention by bank AI
Try using for retail spends like medicine grocery milk etc combined with business spends which will save u

Yes thats what i am thinking. Will start using this as my primary card for spends and then do some small business txs in between.

 

[anirbanm]

Other banks need to do this too. I know for sure that every single electronics goods shop is abusing this, they have dozens of CC's and they take cash payments from customers but swipe their own cc to avail company/merchant discounts and nocost emi discounts in 90 days. All in all, on single transaction these guys are gaining between 5-25% easily. And this is above their legit profit margins.

This is not sustainable. This will ruin the credit card game for end users like us.

True
This has to stop otherwise devaluation will only be increasing

 

[AsB]

Other banks need to do this too. I know for sure that every single electronics goods shop is abusing this, they have dozens of CC's and they take cash payments from customers but swipe their own cc to avail company/merchant discounts and nocost emi discounts in 90 days. All in all, on single transaction these guys are gaining between 5-25% easily. And this is above their legit profit margins.

This is not sustainable. This will ruin the credit card game for end users like us.

Wow. This makes a ton of sense. Recently, these offline shops were offering as much discounts in electronics, as in Online shops. Now, I understand why !!

 

[AllSeeker]

Wow. This makes a ton of sense. Recently, these offline shops were offering as much discounts in electronics, as in Online shops. Now, I understand why !!

Actually, if you have cc, its kind of better to go to physical store unless discount gap is huge or availability is issue.

At least that's what I prefer

 

[TechnoFino]

Really appreciate your honesty for bringing out this information in public, especially that this has personally affected you as a customer.
I would like to know the pattern what Axis has identified on your spending basis which they have sent such notice?
1. Have you done similar amount of spending on all 5 credit cards mentioned in the mail?
2. According to my assumption, your high spends would be on Reserve and Magnus, could you confirm
3. Can you give us a ballpark figure or rounded off number as to what was your spend on those two cards or the combined spend?
4. Do you feel any particular/repeated spend on a merchant sent this signal to the bank or was it because of high value trxs
5. Any new/different spend done in these two months- Dec and Jan which was never performed before on your card account?
We all value your opinions @TechnoFino , hence require these clarifications so that we can be much aware about our usage and spending pattern in general

1. just 2 cards.. maybe 3
2. reserve yes, magnus no
3. I can't do that now.
4. yes, it can be a reason...
5. Everything was new in dec and jan

Thanks for sharing this. Just wanted to understand have they flagged off particular transactions seeking justification or have they flagged off the entire set / all of the transactions done in those months and seeking replies. Request if you can also share in which manner you would be providing the proofs saying it is personal only. For e.g., if you have used it for a utility payment, would you need to share the bill? What about any travel bookings for friends and extended family? This is such a grey area. Any views would be helpful to have. Thanks.

they are asking for some selected merchants only.
All my transactions was personal. if you can show invoice on your name (GST paid invoice, not edited 😅) then you are safe. you can spends Cr.. doesn't matter, but if bank ask you for clarification, you have to submit documents.
yes, I have to share utility bill invoices.
No travel booking for friends are not grey area, it's not allowed according to bank's t&c. you can book for your family.

I think depending on the amount involved and the MCC, Axis would already know by now, if it is a business transaction.

they still ask you for clarification. Because those are HNI cards, they'll not close cards directly.

does loading a wallet using credit card and transferring that money from wallet to bank considered as a business transaction/fraud?

have the banks specifically mentioned that this is not allowed?

can the banks cancel cards for card-wallet-bank transactions?

According to credit card's MITC you can not rotate money to manipulate its rewards system. so it's not allowed.

Broadly you are in trouble if you are doing transactions on a business site regularly and they form the bulk of your expenses. One could be paying rent but that would be max 50k per month. If its higher and you produce a receipt with a landlord different from your family surname, you could be safe. Amex also cancels cards if there are such transactions afaik.

Fake rent payment is very risky. Everyone should stay away.

Thanks for sharing. How can they expect one to have all the invoices ? I mean unless it is a high value transaction, I don't retain invoices as it is pointless.

Do you have invoices for all your purchases in this duration?

they ask for high value transactions only in maximum cases

 

[CMG]

We need a new thread with

1. just 2 cards.. maybe 3
2. reserve yes, magnus no
3. I can't do that now.
4. yes, it can be a reason...
5. Everything was new in dec and jan

they are asking for some selected merchants only.
All my transactions was personal. if you can show invoice on your name (GST paid invoice, not edited 😅) then you are safe. you can spends Cr.. doesn't matter, but if bank ask you for clarification, you have to submit documents.
yes, I have to share utility bill invoices.
No travel booking for friends are not grey area, it's not allowed according to bank's t&c. you can book for your family.

they still ask you for clarification. Because those are HNI cards, they'll not close cards directly.

According to credit card's MITC you can not rotate money to manipulate its rewards system. so it's not allowed.

Fake rent payment is very risky. Everyone should stay away.

they ask for high value transactions only in maximum cases

Were the transactions related to running ads on Google, Fb, Amazon or something similar?