RBI tweaks credit card billing norms

Reserve Bank of India (RBI) has said that banks will now report past dues and levy any late payment charges on credit card holders only if the payment has been due for more than three days.

"Banks shall report a credit card account as 'past due' to credit information companies (CICs) or levy penal charges, viz., late payment charges, etc., if any, only when a credit card account remains 'past due' for more than three days," said RBI in a notification.

However, the banks will calculate the late payment fees etc from the date the bill would have been due. The minimum amount due is not paid fully within 90 days from the payment due date then the credit card account is treated as Non-Performing Assets (NPAs).

The regulator said that this has been done with the idea of enforcing a greater credit discipline amongst credit card users. Credit card holders are billed on a monthly basis. As per the RBI data, there are 21.2 million credit cards in the country.