Factual Matrix 

In relation to The required inspection for the Supervision Evaluation was carried out by RBI on 31-3-2023. The examination discovered that the bank had assessed penalties for late payment of credit card dues in some accounts, even though the consumers had paid the dues through third-party platforms by the due date. In credit card accounts, the amount spent is billed to the card users through a monthly statement with a specific due date for repayment, states the guidance on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts. Banks provide cardholders with the opportunity to pay the minimum amount due on the due date, either in full or in part, and roll over the remaining debt to the billing cycle for the following month. If the minimum amount due, as shown in the statement, is not paid in full within 90 days of the payment due date specified in the statement, the credit card account will be considered a non-performing asset.

Conclusion of the Bank 

Axis Bank Ltd. was fined Rs. 30 lakhs by the Reserve Bank of India for failing to follow the guidelines on prudent norms on income recognition, asset classification, and provisioning pertaining to advanced credit card accounts. Only when a credit card account has been past due for more than three days may banks collect penalties, late payment fees, etc., or report the account as past due to credit information agencies. But the payment due date indicated on the credit card statement must be used to calculate the number of “days past due” and late payment fees. In light of this, the RBI determined that the allegation of non-compliance with the aforementioned RBI orders was proven and merited the imposition of a monetary penalty on the bank, to the amount of such non-compliance.