Supreme Court Upholds High Credit Card Interest Rates

The Supreme Court has set aside a National Consumer Disputes Redressal Commission verdict that deemed interest rates over 30% on credit card dues as unfair. The court stated that such rates are legal under the Banking Regulation Act and that banks did not engage in deceptive practices.

In a landmark verdict, the Supreme Court overturned the previous ruling by the National Consumer Disputes Redressal Commission, which considered credit card interest rates exceeding 30% as unfair trade practices. The apex court's decision allows banks to continue charging high rates, aligning with existing RBI policies.

The bench, led by Justices Bela M Trivedi and Satish Chandra Sharma, clarified that the NCDRC lacked the jurisdiction to alter terms agreed upon by banks and credit card holders. The judgment reaffirmed the RBI's delegated powers under the Banking Regulation Act, emphasizing that no misrepresentation or deception was involved.

This ruling follows appeals from major banks, including Citibank and HSBC, challenging the consumer commission's assertion that high interest rates exploited borrowers. The Supreme Court emphasized the informed consent of credit card users, who are made aware of all relevant terms, including interest rates.

(With inputs from agencies.)