George Mathew & Swarup Chakraborty of Indian Express Mumbai have done the following story:
At a time when banks are slashing home loan and other lending rates, they are quietly hiking the interest rates on credit card outstandings.
Since October 2008 banks have raised interest rates on credit cards, some by over 4 per cent per annum. The interest charges of leading card issuer SBI Cards, have gone up to 3.35 per cent interest per month, or 40.2 per cent per annum, on roll-over credit. In October 2008, it used to charge 3.10 per cent per month, or 37.8 per cent per annum, as finance charges.Standard Chartered Bank has hiked the interest rate to 3.49 per cent per month, or 41.88 per cent per annum, this month as against 3.40 per cent per month, or 40.80 per cent per annum earlier.
Citibank too raised the rates and 3.5 per cent per month (37.8-42 per cent per annum) from around 3.10 per cent as finance charges.”
My story starts here: the charges are on a monthly basis WITH MONTHLY COMPOUNDING – the interest charged per month figure is correct, but the per annum rates are WRONG.
Here is how it looks:
SBI – was charging 44% per annum, now it is charging 48% per annum
Standard Chartered bank was charging 48.49 …now it is 49.36% per annum
Citibank was charging 44.24% …now it is 51.11%
So the increase is a reasonable 4% by SBI and 7% by Citibank.
Hey guys at RBI….why is the Anglo Saxon continuing to milk us?
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