In credit card accounts, the amount spent is billed to the card users
through a monthly statement with a definite due date for repayment.
Banks give an option to the card users to pay either the full amount or a
fraction of it, i.e., minimum amount due, on the due date and roll-over the
balance amount to the subsequent months' billing cycle.
It has come to our notice that
there are divergent practices being followed by banks with regard to asset
classification status of credit card accounts if minimum amount due is not paid
on the specified due date.
While some banks reckon the due date specified in the statement for
payment of minimum amount due to determine the over-due status, some banks
reckon the subsequent billing date to determine the over-due status of the
minimum amount due.
In order to bring in consistency and induce transparency, it is advised
that a credit card account will be treated as NPA (non-performing asset) if the
minimum amount due, as mentioned in the statement, is not paid fully within 90
days from the next statement date. The gap between 2 statements should not be
more than a month.
Banks should follow this uniform
method of determining over-due status for credit card accounts while reporting
to credit information companies &
for the purpose of levying of penal charges, viz. late payment charges,
etc., if any.
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