The Reserve Bank of India (RBI) responded to mounting complaints from credit card users about harassment through aggressive marketing of credit cards. This basically involved ambushing people at shopping malls or outside airports and even stealing exclusive databases to dump cards on people. It gave rise to great irritation and innumerable cases of erroneous card activation and wrong debits to customer accounts followed by harassment to pay up inflated charges and disputed bills. Banks also used the Credit Information Bureau of India (CIBIL) to damage the financial credibility of anyone who disputed their tactics or billing. The RBI then stepped in with a set of rules to stop the harassment of 15 million credit card holders as well as those who did want the piece of plastic.

It also introduced No Call Directories. For sometime after that problems seemed to have abated. Indeed, the old complaints have vanished, especially since most issuers scrapped their annual credit card fee, which led to the maximum aggravation.

However, a set of even more serious complaints have begun to hit the offices of banking ombudsmen and the RBI. These often pertain to extortionate billing on overdue amounts or dubious practices aimed at inflating the sum on which interest is chargeable.

Another trick is to lure customers by offering facilities such as entry to airport lounges or insurance cover and quietly withdrawing them within months after the offer is made. The genesis of the problem lies in the fact that everything about a free credit card costs the issuer a monetary sum — from printing the security-enabled card to sending out monthly statements, as well as the glossy brochures offering special schemes—everything costs money and the issuer earns nothing from card holders who pay their entire outstanding within the due date.

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