SC allows banks’ appeal against NCDRC cap on interest on credit card dues

The Supreme Court on Friday (December 20, 2024) allowed appeals filed by banks challenging a 2008 National Consumer Disputes Redressal Commission (NCDRC) order, which held that charging over 30% interest on credit card dues amounted to unfair trade practice under the Consumer Protection Act.

A Bench of Justices Bela Trivedi and Satish Chandra Sharma pronounced the judgment on the batch of appeals.

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A copy of the judgment is still awaited.

The NCDRC had passed the order in 2008 on the questions whether banks could charge the credit card users interest at rates ranging from 36% to 49% per annum if there was any delay or default in payment within the time specified.

The commission was concerned with whether such percentages of interest was “usurious”.

It had finally concluded that “charging of interest at rates in excess of 30% per annum from credit card holders by banks for the former’s failure to make full payment on the due date or paying the minimum amount due, is an unfair trade practice”.

The commission had further said that “penal interest can be charged only once for one period of default and shall not be capitalised”.

It had found the charging of interest with monthly rests also an unfair trade practice.