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In a move that will bring cheer to millions of credit card holders, the Reserve Bank has asked banks not to levy any late payment penalty on credit card customers till 3 days after due date.
Another positive initiative is asking banks to report customers’ credit history to credit information companies, only if the payment has been due for more than three days.
RBI said banks must consider a credit card as non performing asset if the 'minimum amount due' has not been paid within 90 days from the due date.
"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.
Customers have the option to either the full amount or a minimum amount on the due date and carry over the balance to the subsequent month's billing cycle.
But a hefty penalty is levied if payment is not made by the due date. The late payment charge starts from Rs 100-700 depending on total outstanding amount to be paid.
With this move, customers get a grace period to make the payment in case they miss the due date.