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Saturday, July 09, 2005

CIBIL Credit Cards at what cost ?

The regulator recognises credit card woes

Credit card issuers across the country probably raised a toast to the Reserve Bank of India (RBI) last week. After a long and sustained lobbying by harried customers, the central bank has finally planned regulatory intervention to check harassment, empower the consumers, increase transparency and force some discipline on companies out to grab market share without matching service standards.

Interestingly, credit card issuers have always offered a simple explanation for the vast mismatch between consumer expectations and their treatment. A top executive of one of the biggest credit card issuers told me that although there are a few genuine mistakes (because the numbers they deal with are very large) where customers are wrongly inconvenienced, in a majority of cases, it is the customer who is usually trying to avoid interest or delaying payment by false claims about not having received their bills in time. But the inordinately large number of genuine complaints, acknowledged and rectified by card issuers (after outside intervention), tell a different story.

In fact, the issue of credit cards in India has always been a one-sided affair, where the only real power that the customer had was to dump the card and switch to another. The creation of the Credit Information Bureau of India Ltd (CIBIL), which is a database of the personal credit record of individuals, had threatened that right as well. Banks now had the power to report consumers with unresolved disputes to CIBIL and cause them grave damage by cutting off their access to credit and loans.

RBI has partially addressed this by recommending that banks must inform customers about their intention to report them to CIBIL. This is not an ideal solution, but it gives consumers some time to approach the courts and protect their rights. RBI’s draft guidelines have been put up for public discussion before being issued as a regulation.

Among the broad areas of harassment covered by the bank are the obvious ones such as unsolicited sales calls, unsolicited issue of cards, harassment and intimidation by recovery agents, violation of information privacy and lack of transparency in billing. The new rules will make the credit card companies explicitly liable for the actions of third parties whose services are used for sales and collection.

Similarly, the regulations will ensure that customers are given a clear 10 days to make payments, but this will work only if plastic issuers are also asked to maintain proof that their bills have been sent on time. Also, it says complaints must be resolved in 60 days. But it would be even better if the regulator had prescribed stiff penalties to be paid for some basic offences. Most of the recommendations, if converted into regulation are a good beginning. They put banks on notice that the regulator would have to intervene in order to ensure good customer service.

But some rules may need further tightening. For instance, RBI frowns on the issue of unsolicited credit cards, but does not ban them. Similarly, it provides for an Internet-enabled do-not-call registry allowing people to legitimately avoid harassment through marketing calls, but it could have prescribed a stiff penalty if the list was not honoured. It also does not fix a liability on the card issuer that contacts customers by buying stolen databases of customer information.

An important recommendation is that banks must quote annualised rates on credit card products. Also, interest calculations must be explained to customers with illustrations in each billing statement. This is even better than what we put up with in bills provided by mobile phone providers. Will these rules cover a gamut of tricks devised by banks to lure customers?

For instance, an angry consumer points out that she acquired a State Bank of India credit card because it was promised to be free. However, she found that the very first bill was loaded with uncommitted charges such as insurance premium, yearly charges and service charges. This made a mockery of the free card concept and the consumer, who naturally refused to pay the charges is now being harassed by a collection agent.

Recently, customers of a particular credit card issuer were shocked by interest charges of a few hundred rupees each for failing to pay up a few paise differential that ought to have been rounded off. When they complained, the card issuer confessed that when it had upgraded its credit card software and migrated to another system, it had failed to incorporate the rounding off facility, leading to customers being slapped with a fat charge.

In this case, the Bank says it has identified all such cases and plans to reverse the charges, whether or not it receives a complaint. However, in a similar situation that was brought to the notice of RBI by this newspaper, Citibank had charged a small late fee on the customer despite an unusual four-day bank closure. The bank reversed the charges when exposed, but we are not clear if it bothered to reverse them for all customers.

Many banks such as Citibank and ICICI Bank have slapped charges for insuring customers against potential card misuse. Clearly, this is a service that ought to come free. In many cases the charges have been reversed for customers who complained; but these levies and charges should, at some point of time, attract regulatory scrutiny.

In some respects, the RBI guidelines may have swung the other way by getting too restrictive. For instance, the recommendation that credit cards can only be issued to consumers with independent means will restrict or even eliminate the access of many women and students to the convenience of carrying plastic. This is a little ironical at a time when some professional colleges encourage payment of fees through credit and debit cards.

Similarly, the move to impose restrictions on credit limits to individuals or restricting multiple card issuance is bound to upset card issuers and smacks of moral policing, the presumption being that multiple cards and high credit limits encourage people to go dissolute. But one cannot help thinking that the credit card industry has brought these upon itself.

suchetadalal@yahoo.com

10 Comments:

Blogger heropoo said...

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3:30 PM  
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7:19 PM  
Blogger santosh said...

santosh m
some good for nothing people sugested the idea of cibil but i say we should have a foolproof system but where as in cibil even the inocent people like me are made scape goats for no mistake of mine it is the RBI policy whereas it has mentioned clearly that the guidlines of RBI should be followed and the customer intimated before putting a negative remark on the cibil about a particular person and banks like HDFC and ICICI refuses to obey the orders of RBI and i feel the licences of these banks cancelled otherwise it may be toolate and only god save us from this barbarian act.

12:16 AM  
Blogger premal said...

1. Act Name : THE INDIAN PENAL CODE, 1860
Act title : ACT NO. 45 OF 1860 1*

Enactment date : [6th October, 1860.]




36. SECTION(34.)
Acts done by several persons in furtherance of common intention.

. 1*[34. Acts done by several persons in furtherance of common intention.--When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.]
38. SECTION(36.)
Effect caused partly by act and partly by omission.

36. Effect caused partly by act and partly by omission. Wherever the causing of a certain effect, or an attempt to cause that effect, by an act or by an omission, is an offence, it is to be understood that the causing of that effect partly by an act and partly by an omission is the same offence. Illustration A intentionally causes Z's death, partly by illegally omitting to give Z food, and party by beating Z. A has committed murder
26. SECTION(24.)
'Dishonestly

24. 'Dishonestly'.--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly'.

46. SECTION(44.)
'Injury'.
44. 'Injury'.--The word 'injury' denotes any harm what ever illegally
caused to any person, in body, mind, reputation or property.

17. Act Name : THE CREDIT INFORMATION COMPANIES (REGULATION) ACT, 2005
Act title : NO. 30 OF 2005

Enactment date : [23rd June 2005.]


4. SECTION(CHAPTER II)
REGISTRATION OF CREDIT INFORMATION COMPANIES


5. SECTION(3.)
Prohibition to commence or carry on business of credit information.

3. Prohibition to commence or carry on business of credit information.-Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.

3:07 PM  
Blogger premal said...

1. Act Name : THE INDIAN PENAL CODE, 1860
Act title : ACT NO. 45 OF 1860 1*

Enactment date : [6th October, 1860.]




36. SECTION(34.)
Acts done by several persons in furtherance of common intention.

. 1*[34. Acts done by several persons in furtherance of common intention.--When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.]
38. SECTION(36.)
Effect caused partly by act and partly by omission.

36. Effect caused partly by act and partly by omission. Wherever the causing of a certain effect, or an attempt to cause that effect, by an act or by an omission, is an offence, it is to be understood that the causing of that effect partly by an act and partly by an omission is the same offence. Illustration A intentionally causes Z's death, partly by illegally omitting to give Z food, and party by beating Z. A has committed murder
26. SECTION(24.)
'Dishonestly

24. 'Dishonestly'.--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly'.

46. SECTION(44.)
'Injury'.
44. 'Injury'.--The word 'injury' denotes any harm what ever illegally
caused to any person, in body, mind, reputation or property.

17. Act Name : THE CREDIT INFORMATION COMPANIES (REGULATION) ACT, 2005
Act title : NO. 30 OF 2005

Enactment date : [23rd June 2005.]


4. SECTION(CHAPTER II)
REGISTRATION OF CREDIT INFORMATION COMPANIES


5. SECTION(3.)
Prohibition to commence or carry on business of credit information.

3. Prohibition to commence or carry on business of credit information.-Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.

3:10 PM  
Blogger premal said...

Date:09/03/2009

Her Highness Madam,

I Shri Manubhai V Mehta is residing in Mumbai, age of 65 years, and family Members are: Mrs. Jashvanti M Mehta.(wife), Mr. Hiren M Mehta.(son) and Mr. Premal M Mehta.(son). We are Victims of CIBIL
Please refer our EMAIL dated !3/10/2008 which is enclosed here with for your ready reference. I am very sorry to say that till today there is no result till today.i here with enclose a copy of letter to Allindia bank association date 07 /03/09 which please find in order and go through it.
We the undersigned are members of one family, staying under one shelter, small room area 480 sq. ft. To my best of knowledge, any of us has not to pay any amount to any
Credit institute, I can say on the strength of truth/facts that any credit institute has not filled any case against any of us in any authentic Judicial Court for recovery of their dues.
CIBIL(Credit bureau of India Limited.) is carrying on business of credit information, to collect data from credit institution and to dissemination the same in India. The name reflects in the list of CIBIL, he/she/it are not eligible to get any financial Aids/help/ Credit/Loan from any credit institution. On other hand, it is Mandatory to obtain Certificate of Registration from Reserve Bank Of India before commencement of business of credit information under CIRCA(Credit Information Regulating Company Act. RBI is Dominating Authority for CIBIL. As per information provided to us, under Right To Information Act, by RBI, it is stated that CIBIL has not obtain Certificate of Registration from RBI till the day of that letter. Thus CIBIL is illegal company/institute.
Further we say that CIBIL collect, maintain and dissemination data/credit information without any basic verification regarding truth/facts of the received data, like any authentic Judicial Court Order or Decree of Recovery for the dues. To our best of knowledge and belief any borrower is not a Defaulter Debtor, unless and until, any order of authentic Judicial Court. It must be decided by any Judicial Court, by saying one sided credit institute, it does not becomes true/facts. Each & every citizen of Republic India has got Right to get Justice. Why credit institute does not approach Judicial Court? And they approach directly CIBIL, an illegal company, not recognized by RBI or Govt. of India.

Thus CIBIL is totally illegal company and functioning of its business is also illegal and injustice.
We have taken up this matter with RBI, Ministry of Finance, Ministry of Law and Justice, we have copies of our correspondence, but we could not get justice, that is why we are constrained to write your honor.

CIBIL is dangerous for young energetic person to develop his business activities and his proper growth, as he does not get financial help/loan from credit institutes only because of CIBIL.
Our Humble Pray:
1) All the Records/ data maintain by CIBIL may be
abolished with immediate effect.
2) CIBIL may be dissolved with immediate effect by
special ordinance.
3) There may be a Ban for future that in future nobody
can do such type of business without any authentic
Judicial Court Order, in the interest of Natural Justice.

Hoping Very strict, prompt and rapid action to get us fair justice.

With kind Regards.
Yours faithfully,
MANUBHAI V MEHT(Senior Citizen)
Jt. Secretary of All Maharashtra Human Rights (Borivli unit)
REGD.NO.MAH/697/07/Thane
JASHVANTIBEN M MEHTA. (Senior Citizen)
HIREN M MEHTA. (Young Energetic Youth)
PREMAL M MEHTA. (Young Energetic Youth)


DATE: 13/10/2008.
Her Highness Respected Madam,
Sub: CRY FOR JUSTICE BY SENIOR CITIZEN &
HIS FAMILY MEMBERS.
Ref: IN JUSTICE BY ILLEGAL COMPANY CIBIL &
RBI .

I Shri Manubhai V Mehta is residing in Mumbai, age of 65 years, and family Members are: Mrs. Jashvanti M Mehta.(wife), Mr. Hiren M Mehta.(son) and Mr. Premal M Mehta.(son). We are Victims of CIBIL.
To my best of knowledge & belief CIBIL is doing business to Receive and
Maintain Credit Information for Individuals and Companies, such Baseless Credit Report created by their (CIBIL’S) Members and supplied to CIBIL CIBIL Circulating this information to their other members, without verifying correctness of such information.
Members of CIBIL are Banks and Credit Institutions, on the base of Data
Of CIBIL (Negative Credit Report) they deny for credit to such Individuals and Companies. CIBIL never confirm with their members that whether they have got any Judicial Court’s order against such Individuals or Companies for whom they have created Negative Credit Report? As per our Constitution every citizen have Fundamental Right to get Justice, without any Judicial Court’s Order nobody can declare any borrower as a defaulter debtor. CIBIL and their members are doing so that is not only Illegal but also Unconstitutional. It is Violation of our Constitution.
Under Bank Act and CICRA 2005, it is Mandatory to obtain Certificate of Registration form RBI to do the Business of Credit Information. CIBIL have not obtain. It is also violation of Bank Act and CICRA.
Because of the business of CIBIL many young energetic Indian
citizen’s life is being ruined. He does not get financial aid for his own Shelter and to do any activities for his living (To meet both ends). He is being Defame. He is constrained to commit suicide. It is violation of Indian Penal Code.
On one hand Anti National Activist (Desh Drohi) terrorist, attacker upon
Our Parliament can be alive, even after punishment of to hanger till death, by Supreme Court, till he get justice, by way of mercy petition, but innocent borrower can not get Justice, to live. Let us remember package declared by Central Government of India of Rs.60 thousand crore to write off established debts of Farmers and they are eligible to get new Loan at cheaper rate but by way of one sided unproved Negative Credit Report created by members of CIBIL and circulated by CIBIL, innocent borrowers in mass have to suffer whole life. Is it justify?
Thus CIBIL is Illegal and Unconstitutional Company.
I have written all these to CIBIL, RBI, Hon’ble Finance Minister, Hon’ble Prime Minister, Her Highness President of India and My Lord Chief Justice of Supreme Court. But with great regrets I have to say that result is zero.
Members of CIBIL prepare their Balance sheets with false figures of not receivable amount, like false debts shown in our a/c, in Assets to show glory pink picture.

Humble Pray:
Direction be given to proper Authority to take strict and prompt/rapid action against CIBIL.
Negative Credit Report, for any one, without any Judicial Court’s Order be deleted with immediate effect.

Thanking you,
Yours faithfully,
(M.V.MEHTA.) Senior Citizen.

Jt. Secretary of All Maharashtra Human Rights (Borivli unit)

REGD.NO.MAH/697/07/Thane




DATE :07/03/09
Dear Sir ,

All Banks provide Credit Information to CIBIL without any strict proof like any Judicial Court Order decree for recovery of their dues Any borrower is not defaulter debtor unless and until ther is any authentic Judicial Court Order Because of CIBIL many eligeble persons do not get Bank Loan Only small borrowers are victims of CIBIL It is injustice to small borrowers on other hand All Banks prepare their Balance Sheets to show rosy picture by showing false figures of Assets like Receivable amounts actually that is not all receivable A day will come on that a big scandle of many banks will come out like Satyam Computor and many bank will have to go for Insolvancy It must be stopped with immediate effects to save our Nation All Banks should not provide any credit information to CIBIL without any strict proof in the interest of natural justice Prompt and rapid action be taken CIBIL is illegal company as any company carring on a bussiness of credit information has to obtain a certificate of registration from RBI before commencement of bussiness.
it is mandatory under CIRCA(CREDIT INFORMATION REGULATING COMPANY ACT) we have recived a letter from RBI singed by V.S .DAS (EXECUTIVE DIRECTOR AND CPIO)stating that CIBIL has not obtain certificate of registration from the RBI till the day of the letter that means CIBIL is illegal company.even though sevaral complaint to RBI for CIBIL till today no action has been taken. WHy?
it's seems that CIBIL is working in colluation with RBI,MINISTRY OF FINANCE, and ALL INDIA BANK ASSOCIATION . to best of knowledge and belif it's seems that again we are repating the action of our fore father to go for slavery of other nation as in the past EAST INDIA COMPANY acted. it should be stopped with immidiate effect to save the nation and for the fast growth of our young energetic youth in the intrest of natural justice.

Thanking you,
your's faithfully
Manubhai V Mehta (Seniour Citizen)
Jt. Secretary of All Maharashtra Human Rights (Borivli unit)
REGD.NO.MAH/697/07/Thane
Please take action against CIBIL , CIBIL is illgal under bank act,, please take strick action to save our nation to become slave.

17. Act Name : THE CREDIT INFORMATION COMPANIES (REGULATION) ACT, 2005
Act title : NO. 30 OF 2005

Enactment date : [23rd June 2005.]


4. SECTION(CHAPTER II)
REGISTRATION OF CREDIT INFORMATION COMPANIES


5. SECTION(3.)
Prohibition to commence or carry on business of credit information.

3. Prohibition to commence or carry on business of credit information.-Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.


As a result of Illegal Business of CIBIL a young energetic with high ambition Indian Citizen’s Life becomes ruined, he constrained to go for suicide. Thus knowingly or unknowingly, CIBIL AND THE MEMBER OF CIBIL are part of worst result of their Illegal Business. It is an Offence Under Indian Penal code Section 304, 307 and 120(b).
By CIBIL’S Illegal Business a young energetic Indian Citizen is being Defame. It is violation Defamation Act 1860, Under Section as below:
1. Act Name : THE INDIAN PENAL CODE, 1860
Act title : ACT NO. 45 OF 1860 1*

Enactment date : [6th October, 1860.]




36. SECTION(34.)
Acts done by several persons in furtherance of common intention.

. 1*[34. Acts done by several persons in furtherance of common intention.--When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.]
38. SECTION(36.)
Effect caused partly by act and partly by omission.

36. Effect caused partly by act and partly by omission. Wherever the causing of a certain effect, or an attempt to cause that effect, by an act or by an omission, is an offence, it is to be understood that the causing of that effect partly by an act and partly by an omission is the same offence. Illustration A intentionally causes Z's death, partly by illegally omitting to give Z food, and party by beating Z. A has committed murder
26. SECTION(24.)
'Dishonestly

24. 'Dishonestly'.--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly'.

46. SECTION(44.)
'Injury'.
44. 'Injury'.--The word 'injury' denotes any harm what ever illegally
caused to any person, in body, mind, reputation or property.

17. Act Name : THE CREDIT INFORMATION COMPANIES (REGULATION) ACT, 2005
Act title : NO. 30 OF 2005

Enactment date : [23rd June 2005.]


4. SECTION(CHAPTER II)
REGISTRATION OF CREDIT INFORMATION COMPANIES


5. SECTION(3.)
Prohibition to commence or carry on business of credit information.

3. Prohibition to commence or carry on business of credit information.-Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.

3:11 PM  
Blogger santosh menon said...

Thanks premal,
Satyam also used to give credit information and hope now also it gives and it is one of the fradulent company of international repute which is proved and we all know that nothing is going to happen to the fraudster mr. Raju and he will come out scot free one day as this is what happened in our country scince independence.
thankls to all the rulers of this country.

12:00 PM  
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1:40 PM  
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Blogger Mary D'souza said...

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