Banks Can Charge Over 30% Interest On Credit Card Dues: SC

Banks can now impose interest rates exceeding 30 per cent on credit card dues after the Supreme Court overturned a 16-year-old ruling by the National Consumer Disputes Redressal Commission (NCDRC), which had deemed such high rates an unfair trade practice.

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A bench comprising Justices Bela M Trivedi and Satish Chandra Sharma declared the NCDRC's stance—that interest rates above 30% per annum constituted an unfair trade practice—“illegal” and an overreach into the Reserve Bank of India's explicitly delegated authority.

The court emphasized that the NCDRC's decision conflicted with the legislative intent of the Banking Regulation Act, 1949.

In the opinion of the apex court, banks had in no manner made any misrepresentation to deceive the credit card holders and the pre-conditions of "deceptive practice" and unfair method were manifestly absent.

The court said NCDRC had no jurisdiction to rewrite the terms of the contract entered between the banks and the credit card holders, which the parties had mutually agreed upon.