Citi, the beleaguered financial company has appealed the order of National Consumer Disputes Redressal Commission[30% APR ceiling on credit card] in the Supreme Court. The matter will come up for hearing on Sept-8th.
Citi in its argument is taking shade under the RBI laws which didn’t fix any ceiling on Credit Cards, which are treated as unsecured loans. Citi in its defense said,
The imposition of the upper cap of interest to a degree turned non-priority sector lending into priority sector lending. The NCDRC failed to appreciate that the market in India is still developing and the risk of default is relatively high and legal remedy has its own costs.
Legally, it looks like Citi is going to have its way. However, lets hope the Supreme Court gets into the judicial activism mode and orders the RBI to review Credit Card policy and sing in tune with NCDRC order of fixing the ceiling at a limit of 24% rather than 30%.