The New Policy Change
Banks are no longer allowing credit card users to pay more than their outstanding balances. Any surplus amount paid is now being refunded to the account holder.
Why The Sudden Shift?
The policy change is primarily aimed at mitigating the risks of money laundering and fraud. Banks have indicated that credit cards should not be treated as a vehicle for storing extra funds, highlighting the importance of adhering to financial laws. An official from a leading bank noted that this move aims to prevent misuse in international transactions, including possible account hacks.
Impacted Customer Base
The new policy particularly affects users who intentionally pay more than their outstanding balance to maintain or increase their credit limits. Bankers suggest that such users can make immediate payments right after purchase to manage their credit limits.
Expert Opinions
Spokespersons from HDFC Bank, SBI Card, and Axis Bank have made it clear that their systems now automatically prevent overpayments through their mobile apps. ICICI Bank customers, however, reported that they were still able to make excess payments. A HDFC spokesperson stated that a credit card is a lending product and should not be treated as a savings account, reiterating that the new policy is in line with financial regulations aimed at preventing money laundering and other illegal activities.
| Bank | Prevents Overpayment | Automated Refund | Mobile App Support |
|---|---|---|---|
| HDFC Bank | Yes | Yes | Yes |
| SBI Card | Yes | Yes | Yes |
| Axis Bank | Yes | Yes | Yes |
| ICICI Bank | No (As of Now) | No (As of Now) | Yes |
Newly issued guidelines instruct banks to refund any surplus credit card balance, further emphasizing the need for compliance with anti-money laundering policies. By adhering to these new measures, banks aim to create a more secure and compliant financial environment for their customers.
