The Hindu Business Line : Think twice about paying credit card dues

The bank has imposed a fee of Rs 100 for credit cards payments made in cash with effect from June 1. ICICI Bank has about 9 million cards in the market and commands a 33% market share in the card industry.

As everybody may not be willing to pay in cheques, the new rule is boundto cause lot of inconvenience for card holders, say some customers.

“I get a monthly minimum payment of Rs 500 and I always pay it personally at bank for a variety of reasons. Is payment more important or is mode of payment more important?”quips Mr G. Subrahmanyam, software engineer, who holds an ICICI Bank creditcard.

“When banks are told to accept even coins by the Reserve Bank of India, how can ICICI impose fee for paying in the legal currency of the land? There should be some incentive for paying dues through cheques, but not fine for cash payments,” he lamented.

According to an expert on banking affairs who preferred not to be identified, the bank’s move can be faulted on the grounds it hurts a customer. “The move is definitely not customer-friendly. The objective could be to derive additional income from sizeable customer base. But this could increase hidden costs as everybody may not read the small print at the bottom of his/her monthly statement,” he felt.

When contacted, a senior RBI official said, “As per general rules cash should be an acceptable mode of payment every where. While the RBI does not regulate services charges, it examines the reasonability aspect on a case-to-case basis.”

For example, a transaction fee of Rs 100 may not be reasonable when one wants to pay in cash a due of Rs 200. “This needs to be looked at,” theofficial added.

On the objective of the move, an ICICI official in Mumbai said, it was aimed at “reducing footfalls in the branches”. He said that the bank currently receives about half of its credit card payments through cheques. There was no clarity on whether the other half comes entirely through cash or through other modes such as ECS/ online transfers etc and in what proportion.