Name of company/service: Credit card charges
I received the monthly credit card bill and find that the interest charged is approx Rs 2600/- for an outstanding amount of Approx Rs 10000/-. On persistent follow up, the bank authorities have mentioned that the charges are correct since they follow a day rate. The applicable rate is around 36 to 42.5% p.a. But the above mentioned charges to whooping 300% p.a. which is ridiculous.
Even RBI’s Banking Ombudsman was non-comittal about these charges saying that the banks are advised to follow the rules and they can apply the interest charges and calculations as per their definition. The only thing RBI checks is if the method is part of the statement and mentiond in MITC (Most importatn terms and conditions). I believe RBI should direct all banks to follow the same process and not fleece the customers.