Top court rejects 30% cap on credit card interest

The Supreme Court on Friday reversed a 2008 ruling by the National Consumer Disputes Redressal Commission (NCDRC) that barred banks from charging more than 30% annual interest on overdue credit card payments, allowing banks to determine their own rates within existing regulations.

- Utkarsh Anand

NEW DELHI:

A bench of justices Bela M Trivedi and Satish Chandra Sharma set aside the NCDRC's decision, which had declared such high rates to be an unfair trade practice. The apex court's ruling came in response to appeals by multiple banks, including Standard Chartered Bank, Citibank, and HSBC, contesting the NCDRC's cap on credit card interest rates.

"In view of foregoing reasons, the judgment of the NCDRC is set aside and appeals are allowed," said Justice Trivedi while delivering the verdict. A detailed copy of the judgment was awaited till the time of going to print.

The impugned NCDRC order was stayed by the Supreme Court on February 3, 2009.