Credit card-holders in India, who pay the highest
rates of interest in the world, have been ripped off Rs 6,000 crore as
“extra charges” by banks in a span of 10 years, according to a rights
group.
“The banks have already extracted around Rs 6,000 crore in the name of
late fee, cash advance fee, billed finance fee, over-limit fee, cash
withdrawal fee, cheque pick up fee and service taxes on all these fees,”
C V Gidappa, General Secretary of Credit Card-Holders’ Association of
India (CCHAI), said here quoting a study conducted by his group.
A top official of a multinational bank, who did not want to be named,
said banks charge more for credit card transactions as they foresee
higher risk of default due to the insecure nature of transactions.
Further, credit cards are more convenient tools for easy borrowing.
“Credit card is a very useful instrument as a means of payment. But it
should be used as a borrowing tool very sparingly and if so for as short
a time as possible,” he cautioned.
As part of the study, the association went through the balance sheets
and Loss and Profit statements of all private as well as nationalised
banks, checking their interest income and non-interest income since 1992
after the introduction credit cards in India, Gidappa said.
It also plans to move the Supreme Court seeking an order asking banks to
pay back the extra money collected.
The average interest rates on the card transactions and loans in India
are highest in the world, he said.
