Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

ICICI under scanner for credit card violations

ICICI under scanner for credit card violations
Comment E-mail Print Share
First Published: Sun, May 13 2007. 12 02 PM IST
Updated: Sun, May 13 2007. 12 02 PM IST
New Delhi: Monopolies and Restrictive Trade Practices Commission’s (MRTPC) investigation net has now fallen on private lender ICICI Bank for making false promises to its credit card customers and violating RBI guidelines.
In its preliminary report, the Director General of Investigation and Registration (DGIR), the investigation arm of MRTPC, has said ICICI Bank caused loss to its credit card users besides violating related RBI guidelines.
DGIR, which is conducting a probe against many banks on the same issue, has already recommended action against HSBC and Citibank.
Sources said during investigation DGIR found ICICI Bank had issued more than 50 types of special credit cards but did not explain their features, benefits and liabilities.
Some of the special cards were Solid Gold Card, Bajaj Capital Card, Help-Age India Card, Kingfisher Card and Amway card apart from many alumnus card for various institutions.
In some cases, special customers were promised life-time free cards by direct sales agents (DSAs) of the bank, but were charged annual fees.
However, when contacted, an ICICI Bank spokesperson said they were not given an opportunity to present its case.
“We did not get any query nor were asked to clarify these points by MRTPC,” ICICI Bank’s Head (Corporate Communication) Charudatta Deshpande said.
Sources said DGIR in its report has also said ICICI conducted its credit card business through DSA’s who were working either as independent contractors or on commission.
These DSAs were soliciting the general public by giving an impression that they were the direct agents of the bank — without disclosing their independent status, DGIR said.
This gives an impression to a common man that the promises made by the DSAs were as good as those made by an officer of the bank, it added.
However, the bank spokesman said, “DSAs are supposed to identify themselves and their visiting cards and all other stationary categorically mentions the same.”
“Action is taken against them in case found violating any corporate identity norms,” he further added.
DGIR also said that DSAs of these banks even used government/semi-government offices for soliciting business.
As per the terms and condition of the licenses granted by RBI, these banks are supposed to carry out their activities only from their own branches and offices, the report said.
But Deshpande said there was no RBI norm of not selling cards to government employees or in government offices.
“It depends on the customer where he would like to be serviced... customers, keeping in mind their convenience do ask agents to meet them at office,” he said.
The authority also found that the Most Important Terms and Condition (MITC) document given by banks with credit cards was in English and not in the language known to common people.
As per the RBI guidelines, MITC should have couple of examples of calculation of interest rates applicable to the card holder, which was not found, the report said.
The banks were even not maintaining a do not call registry, which a person can use if he does not wish to receive unsolicited calls or SMSs.
Comment E-mail Print Share
First Published: Sun, May 13 2007. 12 02 PM IST
More Topics: Corporate News | Sector Spotlight |