Pay minimum card due in 90 days or be tagged as NPAhttps://indianexpress.com/article/business/business-others/pay-minimum-card-due-in-90-days-or-be-tagged-as-npa/

Pay minimum card due in 90 days or be tagged as NPA

Earlier credit card users would get 120 days before being classified as NPAs.

The Reserve Bank of India on Thursday asked banks to treat credit card accounts as non-performing if the minimum amount due is not paid fully within 90 days of the payment due date mentioned in the credit card statement.

This represents a tightening of the earlier norms when credit card accounts were classified as NPA if the minimum amount was overdue for 120 days.

The central bank added that banks shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges only when a credit card account remains ‘past due’ for more than three days. RBI data shows that at the end of May, loans to credit cards stood at Rs 32,400 crore, a growth of 23 per cent from a year ago.

[related-post]

To bring in greater credit discipline as also to provide operational flexibility to credit card issuers, RBI said the ‘past due’ status of a credit card account for the purpose of asset classification would be reckoned from the payment due date mentioned in the monthly credit card statement. “Consequently, in case of banks, a credit card account will be treated as non-performing asset if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned in the statement,” RBI said in a notification.

Advertising

In credit cards, the amount spent is billed to users through a monthly statement with a due date for repayment. Banks give an option to the card users to pay either the full amount or a fraction of it or a minimum amount on the due date. With PTI