Tuesday, February 03, 2009

Credit Burden in India

Business Standard has featured the prevailing credit card rates in India. The figures are quite outstanding

Credit card Rates

ICICI Bank ---> 18.00-49.36
HDFC Bank ----> 36.60-39.00
Citibank -----> 18.00-42.00
StanChart ----> 23.88-40.80
HSBC ---------> 33.00-38.40

Supreme Court of India stayed the judgement of the National Consumer Commission, which had capped the interest rate chargeable on credit card holders at 30% yesterday

Banks contended that they are following RBI Guidelines and are allowed to price according to their business will. Banks claim that they are already stretched and are forced to keep the prices high or else they will have to raise the annual fees.

Imagine being charged 49% an year for using your credit card. I think this should be called extortion and nothing else. The truth is it is nice if RBI does not interfere in anything and everything though the present situation demands intervention.

Just some days back there were even cases of Banks hiring third party agents (goons) to get the money back, which starkly shows the awful situation.


Publia said...

With those rates it is certainly worth saving up and doing without.

Balaji said...

very true!!! It is scary if you fall in debt...