Banks disallow excess funds in credit card A/Cs

Indian banks are no longer allowing credit card users to pay more than their outstanding amount. And in the cases where the over payment has been done, they are refunding the excess amount.

The main reason for this is that the banks are concerned about money laundering and fraud. A bank executive said that there have been cases where the excess amount parked in the customer’s credit cards has been used for international transactions using hacking.

The banks have put guards in their applications to prevent customers from overpaying. It is allowed to send money through other banks, but in those cases, the card-issuing banks return the surplus funds within a week.

The report said that HDFC Bank, SBI Card and Axis Bank do not allow their customers to pay above the outstanding amount on their apps.

“There is also a recent guideline that asks banks to refund excess credit balances on cards within a certain period. A credit card is not a prepaid card product to permit loading and utilisation of the instrument,” they said.