Good news for credit card users who have settled their dues but still have been in the bank’s central database blacklist. RBI is framing guidelines which will stop the banks from declaring an applicant as defaulter if he/she has squared their accounts (settled his/her account with the bank after payment of negotiated amount).
Currently, if a card holder has paid the negotiated amount, he/she is still treated as defaulter in bank’s records. This results in a poor credit score as the name will appear in the defaulters list prepared by Credit Information Bureau of India Ltd (CIBIL). This is so because they are dependent on the information furnished by banks.
This situation will make the person unfit to get his/her loans (be it personal, educational, house etc.) sanctioned as banks or other finance company disburse loans based on the information provided by CIBIL. This can become a vicious circle as the customer is asked to settle the new bill raised by the bank, which is the ‘balance amount’ from the earlier settlement plus penalties and interest.
Let us take a live example –>
Ms.A had to pay Rs.75,000 recently to clear her dues, which was already settled for 50% of the then outstanding amount of mere Rs.6,200 in 2001 !! She was forced to pay when her loan application was rejected by the bank because of her name in CIBIL’s defaulter list.
This is just one incident of the many that may happen but RBI is aware of the subject now and the central bank will propose a solution very soon. They are already conducting meeting with the banks and CIBIL regarding this issue. At present when the dues are settled, rest of the amount is treated as ‘written off’ by the banks.
Statistics show that in many cases banks demand a small leftover amount which is not acceptable for the customers. Usually it is the annual fee which the bank says it wouldn’t charge.
For example –>
Mr.Kapil who had a disputed bill of Rs.1000 raised by the bank was to settle his dues by paying Rs.500. But he continued to receive statements showing Rs.500 as outstanding which with time increased to Rs.1200 !!
Subsequently banks again offered to settle the due with a payment of Rs.600 (50% of due amount) and assured that they would issue an “all dues cleared” certificate on his payment. Kapil did pay to clear his name of any dues but he never did receive his certificate.
But the situation is showing signs of improving with the help of RBI’s intervention.
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