The Supreme Court’s decision to reject a 16-year-old ruling by the National Consumer Disputes Redressal Commission (NCDRC) has created quite a stir in the banking industry. The ruling allows banks to charge more than 30 percent interest on credit card dues from customers, overturning a previous cap that had been put in place to protect consumers.
This decision comes as a blow to many credit card holders who have been struggling to pay off their debts, especially during the ongoing economic crisis caused by the COVID-19 pandemic. With interest rates now able to exceed 30 percent, many consumers fear that they will be buried even deeper in debt as they try to make ends meet.
The Supreme Court’s reasoning for overturning the NCDRC’s decision is based on the fact that banks need to be able to cover the costs of providing credit card services, including the risk of default by customers. By allowing banks to charge higher interest rates, the court believes that they will be better equipped to manage these risks and continue offering credit card services to consumers.
While this ruling may be a win for banks, it is a major setback for consumers who are already struggling to make ends meet. It highlights the importance of financial literacy and responsible borrowing, as well as the need for stronger consumer protection laws to prevent banks from taking advantage of vulnerable customers.
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