Credit Card Default Charges under revision:
If you fail to pay your credit card minimum due within due date you may end up paying late payment charges as high as Rs.300.00 and rate of interest on outstanding balance will be as high as 36% PA. Based on all these default charges as charged by credit card companies Govt forms a panel to suggest reforms in e-payments,clearing houses,ATMs and credit & debit cards The government is considering a proposal to slash charges imposed by banks on credit card payment defaults to make it more affordable and to encourage payment by mobile phones as an alternatechanneltoreplacedebitand credit cards as part of a broad reform of the electronic payment system in the country.
Banks now charge an interest rate as high as 36% annually if a credit card customer fails to pay his dues before the billing cycle.There is no charge if the dues are paid on time.But,there have been instances of some customers being charged an interestrateof over 50% for defaulting on credit card payments.Now,as part of a plan to reform the payment system in India,the finance ministry has formed a committee headed by DK Mittal,secretary,financial services,to work out a blueprint.
The committee will broadly suggest reforms in electronic payments,clearing houses,currency chests,automated teller machines,or ATMs,besides credit and debit cards.,replacing credit card payments by mobile payments.
The note which was circulated to members of committee said,mobile phonesareexpected to emerge as an important channel for transaction of payment instructions.Efficient mobile payments would require building a national infrastructure for facilitating real time mobile payments and couldprovideanalternative to ATMs or debit or credit cards for payment purpose.The National Payments Corporation of India,or NPCI,has began to provide Interbank Mobile Payment System,or IMPS a service involving account-to-account transfer of fundsforcustomersregistered with banks for this service.The committee includes representatives from the Reserve Bank of India,Indian Banks Association,NPCI,Institute for Development & Research in Banking Technology (IDRBT),Ernst & Young,Boston Consulting,Mckinsey,Empays Payment System
