Beware! Banks Are Watching Your Credit Card Dues
Bangalore: Have you paid your credit card bill for this month? Make the payment soon or else your card might get blocked in few days. Banks and credit card companies have now started blocking cards even with minimum dues on monthly payments. Most of the banks give sufficient notice before they start disabling the card, but there have been few instances where some private banks have disabled cards within 10 days after the due date, reports Economic Times.
"We give a sufficient window period of 72 days from the due date before we disable the card," said a spokesperson of Kotak Mahindra Bank. Government banks like State Bank of India gives a period of 75 days for payment of minimum dues of the monthly statement, but failing to make the payment within that period might result in the card blockage.
As a result of financial crisis in 2008 more of the bad debts raised up to 6 percent in India. As an after effect the industry witnessed several card issuers moving out of the business. Thus as a precaution banks have started adopting more harsh approach; they have decided to do a thorough research on the past financial history of every new customer before issuing a new credit card.
"Right now, delinquency levels are at 1.5 percent. From an industry standpoint, there is some risk build-up on account of the external environment," Pallav Mohapatra, CEO of SBI Card, said. Officials added that, an economic slump results in fall of disposable income (either job loss or marginal salary hike), which in turn impacts repayment. On the other hand, industry observers stated that banks are adopting a 'portfolio management' approach with respect to credit cards and other retail lending activities.
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