RBI guidelines regarding credit card late payment charges

[FinoGuy]

I do

I don't think card issuers will follow these rules. According to RBI rule, card issuer must inform the proper reason of rejection of credit card to customer. I never seen any of the bank doing that. Only thing we can hear from them is "Internal Policy".

True, I know 2 people who had similar experience. One of them escalated the issue to RBI ombudsman & got reply as 'providing credit card or not is solely at the bank's discretion'. (CC issuer was axis bank)

 

[Millenial Engineer]

1)No. As per ss payment received by ICICI in 24(past 1 day, so within grace period)
2)yes,get the gst reversed (by reopening service request) as charges already reversed

I spoke to customer care before I had seen your reply. i got the below reply verbally from them. (it didn't really make sense to me).

1. I paid from my end on 24th ( or to say initiated the transaction ---> as said before the due date is the 23rd so the 24th is t+1) Therefore it is within the extra grace period as stipulated by rbi, so no INTEREST is charged.

now comes the funny part.

2. The bank received the amount on 27th which is LATE, so a late payment fee needs to be paid, in my case T+3=27TH but they charged me on the 26th --? why? because according to that cust care person they follow T+2 so after 24,25th they charged me.

but still, i repeat- according to them if you send money withing T+2 (NOT T+3) they dont charge interest.
but if they don't receive the money within T+2 ( not T+3) they charge you a late payment fee.


how can I be making payment on time and be late at the same time and they are wrong, can anyone give me a clear answer as to how to handle this, please read the below info directly from rbi before replying.

for reference. please read this.

Reserve Bank of India - Master Directions

section :- 9. Interest rates and other charges---point 'v' OR just search the words ' three days'.

And Please check if you can find info on this:- Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’

i think this link explains that article

Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances–Commercial, Corporate & Institutional Banking

www.sc.com

 

[avishj]

I spoke to customer care before I had seen your reply. i got the below reply verbally from them. (it didn't really make sense to me).

1. I paid from my end on 24th ( or to say initiated the transaction ---> as said before the due date is the 23rd so the 24th is t+1) Therefore it is within the extra grace period as stipulated by rbi, so no INTEREST is charged.

now comes the funny part.

2. The bank received the amount on 27th which is LATE, so a late payment fee needs to be paid, in my case T+3=27TH but they charged me on the 26th --? why? because according to that cust care person they follow T+2 so after 24,25th they charged me.

but still, i repeat- according to them if you send money withing T+2 (NOT T+3) they dont charge interest.
but if they don't receive the money within T+2 ( not T+3) they charge you a late payment fee.


how can I be making payment on time and be late at the same time and they are wrong, can anyone give me a clear answer as to how to handle this, please read the below info directly from rbi before replying.

for reference. please read this.

Reserve Bank of India - Master Directions

section :- 9. Interest rates and other charges---point 'v' OR just search the words ' three days'.

And Please check if you can find info on this:- Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’

i think this link explains that article

Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances–Commercial, Corporate & Institutional Banking

www.sc.com

You need to push this further up the chain. The payment was made on 24th, but I think it got settled only on the 27th, nonetheless, they should not be charging you. Push to the higher level, else go to RBI Ombudsman.

 

[Millenial Engineer]

Hi,

@TechnoFino . Please read my post starting on Sunday( 06-11-2022).

I'm looking for a guideline explaining the current ambiguity around if the due date is currently included in the 3 days grace period and what is counted - the date of payment or the date of credit to the bank when it comes to charging late payment fees and interest.


can anyone explain this?

 

[Pradeepbansal]

Hi,

@TechnoFino . Please read my post starting on Sunday( 06-11-2022).

I'm looking for a guideline explaining the current ambiguity around if the due date is currently included in the 3 days grace period and what is counted - the date of payment or the date of credit to the bank when it comes to charging late payment fees and interest.


can anyone explain this?

have you complained against this to RBI ombudsman yet? if not, please do this first since they will ask on your behalf to the bank all this and get your doubts clarified in detail straight from the bank.

if anyone posts here some answer according to them, you will still have doubt in your mind whether that person really knows about it or not. you will end up searching again and again for the right answer.

its better to just complaint in rbi ombudsman and let bank submit its reply which will be shared with you if you ask for it.

keep us posted here of the developments on the matter.

 

[Utkarsh]

Your credit card total bill amount - 50,000/- Due date- 27th jan.
Assume, you have paid 20,000/- before 30th jan.
After 30th jan, your card issuer bank can only charge you late payment fees/ interest only on remaining 30,000/-

Need clarification on this part, so if I pay on 29 and 30th as a part payment then the interest is getting charged on even that payment and bank is not helping with that.
As per RBI notification-
Penal interest, late payment charges and other related charges shall be levied only on the outstanding amount after the due date and not on the total amount.
So interest charges will be on due date outstanding or t+3 days outstanding?
and second thing does this outstanding includes unbilled transactions for next month as well?

 

[Strange]

If you are using a credit card, you should Know about these RBI guidelines (effective from 1st July, 2022)

1. Card issuers shall report a credit card account as 'past due' to credit information companies (CICs) or levy penal charges, viz. late payment charges and other related charges, if any, only when a credit card account remains 'past due' for more than three days.

That means, You will get 3 days extra time after due date for paying your credit card bill. ie.- your card due date - 27th January Bank can't levy late payment/interest charges/report late payment to credit bureaus if you make payment by 30th Jan.

2. Penal interest, late payment charges and other related charges shall be levied only on the outstanding amount after the due date and not on the total amount.

ie.- Your credit card total bill amount - 50,000/- Due date- 27th jan.
Assume, you have paid 20,000/- before 30th jan.
After 30th jan, your card issuer bank can only charge you late payment fees/ interest only on remaining 30,000/-

3. Changes in charges shall be made only with prospective effect giving prior notice of at least 1 month. If a cardholder desires to surrender his/her card, he/she shall be permitted to do so without levying any extra charge for such closure, Subject to payment of all dues by the cardholder.

4. There shall not be any hidden charges while issuing credit cards free of charge.

My friend forgot to pay his icici credit card bill on due date. He paid this bill on 3rd day after due date. Is icici going to report 3 days late payment in the credit report and charge late payment fee for the same or ICICI has implemented new RBI guidelines? Can anyone confirm?

@Batmanbaba
@TechnoFino
@Wealth is my birth right!
@HyperBeast
@Abhishek012
@007
@anirban.choudhury
@Millenial Engineer
@FinoGuy

 

[Batmanbaba]

My friend forgot to pay his icici credit card bill on due date. He paid this bill on 3rd day after due date. Is icici going to report 3 days late payment in the credit report and charge late payment fee for the same or ICICI has implemented new RBI guidelines? Can anyone confirm?

@Batmanbaba
@TechnoFino
@Wealth is my birth right!
@HyperBeast
@Abhishek012
@007
@anirban.choudhury

Nothing will happen.... Every bank gives 3 days grace period from the last date of payment.... They wont report it to cibil....

 

[Strange]

Nothing will happen.... Every bank gives 3 days grace period from the last date of payment.... They wont report it to cibil....

Thanks for the confirmation.

 

[anirban.choudhury]

My friend forgot to pay his icici credit card bill on due date. He paid this bill on 3rd day after due date. Is icici going to report 3 days late payment in the credit report and charge late payment fee for the same or ICICI has implemented new RBI guidelines? Can anyone confirm?

@Batmanbaba
@TechnoFino
@Wealth is my birth right!
@HyperBeast
@Abhishek012
@007
@anirban.choudhury

Should not be reported , as it is under grace period

 

[techsearch]

I have a doubt here- very specific but still it is possible many can experience the same. my icici card was due 23rd of last month. I paid the bill 24th early morning before 1 am (not sure the if time of payment makes a difference -only date matters I think) and this was done with another bank's net banking portal.


the minimum amount was NOT paid before.

one-time full payment i sent ,

I saw it in the credit card statement as payment received ONLY ON the 27th morning. and on the 26th icici has already slapped late payment charges AND GST.

But, the date of receiving payment is shown as 24th OCT ONLY, I called customer care and at first, even though I'm aware of the 3-day extra time rule I'm not sure of the specifics of how exactly this rule applies, so I requested cust care people to reverse the late fee- they initially created drama and later agreed to reverse only the late fee and not the GST as they said date on statement might show it as 24th they received credit ( T+1, T=23RD MY DUE DATE) , but in reality, they received on 27th (T+4).


so I asked them why then it shows as 24th then? they didn't explain it nor did they agree and on top of that, they said interest for 1 whole month is going to charged + GST. (CAN ANYONE SAY THE LOGIC BEHIND WHY INTEREST TO BE CHARGED FOR 1 WHOLE MONTH?)

I finally left this conversation at this and I got the late fee reversed. and GST NOT reversed.

NOW I came to this post because I remember this post and since I have checked my latest statement from November. no interest is charged which means that payment -----> 24th should have been calculated as payment within T+3 by bank systems,

I'm attaching the relevant pics regarding this issue.

so therefore my question is :

1. Was ICICI right in charging me a late fee on 26th (T+3) -Shouldn't they wait till the 27th morning to charge if at all they charged?

2. Did ICICI trick me by NOT reversing the GST?

did they report it to CIBIL as well just for 1 day delay ?i have recently missed payment by 3 days.

 

[Millenial Engineer]

did they report it to CIBIL as well just for 1 day delay ?i have recently missed payment by 3 days.

It was not reported as legally its not possible to report i guess, but the late fee was reversed and GST WAS NOT reversed. I Left the issue at that as the GST amount was minimal and not worth the time and effort as i will need to first get an email trail from icici regarding them denying to reverse GST and then goto RBI

 

[metal_heart]

Any update by ppl who missed the payment. How was it dealt by bank by default.
Missed HDFC CC payment by 2 days. Paid after 2 days, via HDFC netbanking itself (should get credit instantly).

Will I be charged Late Payment & Intreset? Will it be reported to CIBIL?

 

[Salvo08]

Credit Card payment defaults at an all time high. 4K crore in limbo.

 

[Avishma1]

Need one clarification on interest charge. If bill is paid after 3 or more days from payment due date then is interest applicable only on the unpaid balance from closed statement or it applies to the total balance on card which includes unbilled charges which are yet to be billed on upcoming statement?

 

[AllSeeker]

Need one clarification on interest charge. If bill is paid after 3 or more days from payment due date then is interest applicable only on the unpaid balance from closed statement or it applies to the total balance on card which includes unbilled charges which are yet to be billed on upcoming statement?

Only unpaid balance, even from the actual statement.
Let's say you had 10k bill, you paid 1k before given time but not rest, then bank can only charge interest on 9k. Nothing else. Failure to pay interest in next cycle will attract interest on everything, including interest on the pending amount from the original statement.

 

[Avishma1]

Only unpaid balance, even from the actual statement.
Let's say you had 10k bill, you paid 1k before given time but not rest, then bank can only charge interest on 9k. Nothing else. Failure to pay interest in next cycle will attract interest on everything, including interest on the pending amount from the original statement.

Thanks for the reply but my question is little different. My card bill was 11k due to be paid by Jan 25th and I missed the payment and was charged late fee. My total card balance was around 85k as I made new purchases since the last statement closing date which are yet to be billed but I paid the entire balance of 85k (billed plus unbilled) on Jan 30th . When statement generated on Feb 6th, the bank billed me interest charge on entire 85k balance plus late fee. Is that something against RBI guidelines?

Your reply will be appreciated.

 

[AllSeeker]

Thanks for the reply but my question is little different. My card bill was 11k due to be paid by Jan 25th and I missed the payment and was charged late fee. My total card balance was around 85k as I made new purchases since the last statement closing date which are yet to be billed but I paid the entire balance of 85k (billed plus unbilled) on Jan 30th . When statement generated on Feb 6th, the bank billed me interest charge on entire 85k balance plus late fee. Is that something against RBI guidelines?

Your reply will be appreciated.

Yes, as said in the original post, that is against the norm. Bank is only supposed to charge interest on the original amount, which was 11k in your case.