The Supreme Court overturned a 2008 verdict whereby banks could set credit card interest rates, backing market forces and the RBI’s cap over the NCDRC’s restriction.

On Friday, the 2008 ruling of the National Consumer Disputes Redressal Commission (NCDRC), which placed a cap of 30% annual interest on credit cards, was overturned by the Supreme Court. With this decision, the apex court allows banks the freedom to determine their own interest rates within the existing regulations.

Following this judgment, several banks, including Standard Chartered, Citibank, and HSBC, moved to the apex court against the NCDRC's decision for holding high interest rates as an unfair trade practice. The NCDRC criticized the Reserve Bank of India (RBI) for not regulating interest rates and argued that exorbitantly high rates could be demonstrated as exploitative for consumers in financial distress.

Today's credit card interest rates in India range from 22% to 49%. Banks defended the rate condemning high interest charges in request form as a collateral cost of risk due to default and operational costs. The Supreme Court validates this Payment & Card interest rate dependence on market forces subject to guidelines of the Reserve Bank of India.