Refund considered as payment?

[mdshafiuddin24]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

 

[SSV]

Merchant refunds are not considered as payment generally by the banks. I have seen banks specifically mentioning this.
It will definitely be adjusted to your bill though.
Not sure about RBI guidelines...

 

[Deleted member 11974]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

it depends on how the payment is credit
if it is reversed then it is considered as a refund otherwise in the statement if it mentions repayment ,imps,neft then it should be considered as a payment.
eitther way it will get adjusted against the oustanding if any

 

[4uziaul]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

Assuming you didn't make the payment expecting a refund, but that's a classic mistake. If your statement was generated, you should have made the entire payment. In your upcoming statement, the excess payment would have been reflected unless there was some outstanding amount, in which case it would have been adjusted against it. Now it's too late, and while you can try convincing them, SBI is not at fault here.

 

[Piyush_Jaiswal]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

Refunds are not considered as payment. You have to make payment for the Amount Due in last statement. It is written in MITC of almost all Banks.

The refund will be adjusted in current billing cycle. The Current Outstanding will be reduced after the refund so you can save on interest (as interest is calculated on current outstanding), but you will have to pay late payment charges.

The late payment charge can be waived off by the bank by talking to them but it is completely up to them and depends on your relationship with the bank.

 

[Ad.Astra]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

Honestly, it doesn't matter. Whatever the refund amount, it reduces the total outstanding amount.

One simple but important discipline one should maintain is that one should always pay the total outstanding amount as mentioned in the credit card statement.

 

[NOOBY]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

it is considered as payment (generally) if the refund is done before statement generation..

Ordered 25k from Amazon and 5k from Croma, then cancelled both... Amazon refund was done but Croma refund credited after statement generation... So, had to pay 5k+other spends (not Amazon's 25k, as that got credited before stmt generation) and now, my Total Outstanding amount is shown as -5000 Cr.

Hope I was able to explain as it happened with me just this month

 

[Card noob]

Always Consider Paying the statement generated amount including refunds...
Immediately pay the remaining amt and Try calling customer care and convince them your case and tell them it is a one time mistake and to reverse the all the charges this time.
They might reverse most of the amt...
In my case, I paid 2 days late (total 5 days) amt was around 1500 they reversed 800

 

[CMGCMG is verified member.]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

As per the RBI master directive, refunds should be considered as payment.

Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022

10 (e) Any credit amount arising out of refund/failed/reversed transactions or similar transactions before the due date of payment for which payment has not been made by the cardholder, shall be immediately adjusted against the ‘payment due’ and notified to the cardholder.

 

[souvikr]

If the refund got credited after statement generation date but before payment due date then you can subtract the refund amount from the statement amount and pay the remaining. If the refund didn't arrive till the payment due date then you need to pay the full amount.

You can safely ignore other comments if it contradicts the above statement. I can see lot of misinformation and confusion here.

 

[Walter White]

FYI

Any credit amount arising out of refund/failed/reversed transactions or similar transactions before the due date of payment for which payment has not been made by the cardholder, shall be immediately adjusted against the ‘payment due’ and notified to the cardholder.

 

[VISHESH_BANSAL]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

Minimum Due Amount was paid Seprately ?

AFAIK, in case of SBI even if Full outstanding Amount is refunded after statement generation , one has to pay atleast minimum due Amount to avoid late fee.

But you can file complaint with RBI as SBI Voilated RBI Guidelines.

 

[knight]

Agree with @CMG @Walter White and @souvikr .
If the refund is reflected before due date, it is considered as payment and you can pay the remaining dues.

Has happened with me multiple times for HDFC, sometimes even for large amounts from airbnb. Never had to pay any charges.

 

[Pankhuri]

Write to SBI customer care. I had a similar issue. Where a payment was reversed but they took over 14 days to mark it settled, which led to some charges and payment dishonor fee. I escalated to nodal officer, they cited some rule but also agreed to reverse the charges. So didn't escalate further.

I also had another incident on Indusind where a payment was reversed. My due date was on 5th, payment was done on 31st of last month, reversed next day and settled on 3rd. I had some 1k balance on the card but was not charged any late fee or such. So they may say it doesn't count towards payment, but apparently it does.

 

[Pankhuri]

FYI

Any credit amount arising out of refund/failed/reversed transactions or similar transactions before the due date of payment for which payment has not been made by the cardholder, shall be immediately adjusted against the ‘payment due’ and notified to the cardholder.

I have another question regarding the master directive

12(b)Before reporting default status of a credit cardholder to a Credit Information Company, the card-issuers shall ensure that they adhere to a procedure, duly approved by their Board, including issuing of a seven day notice period to such cardholder about the intention to report him/her as defaulter to the Credit Information Company. In the event the customer settles his/her dues after having been reported as defaulter, the card-issuer shall update the status within 30 days from the date of settlement. Card-issuers shall be particularly careful in the case of cards where there are pending disputes. The disclosure/release of information, particularly about the default, shall be made only after the dispute is settled. In all cases, a well laid down procedure shall be transparently followed and be made a part of MITC.


Would this mean that if someone pays after the due date and grace period but before the 7 day notice period, they would not be reported as a defaulter.

 

[irohitpragya]

I have another question regarding the master directive

12(b)Before reporting default status of a credit cardholder to a Credit Information Company, the card-issuers shall ensure that they adhere to a procedure, duly approved by their Board, including issuing of a seven day notice period to such cardholder about the intention to report him/her as defaulter to the Credit Information Company. In the event the customer settles his/her dues after having been reported as defaulter, the card-issuer shall update the status within 30 days from the date of settlement. Card-issuers shall be particularly careful in the case of cards where there are pending disputes. The disclosure/release of information, particularly about the default, shall be made only after the dispute is settled. In all cases, a well laid down procedure shall be transparently followed and be made a part of MITC.


Would this mean that if someone pays after the due date and grace period but before the 7 day notice period, they would not be reported as a defaulter.

even after the due date, banks don't report you as a defaulter only if you paid the full outstanding.

 

[SSV]

I have another question regarding the master directive

12(b)Before reporting default status of a credit cardholder to a Credit Information Company, the card-issuers shall ensure that they adhere to a procedure, duly approved by their Board, including issuing of a seven day notice period to such cardholder about the intention to report him/her as defaulter to the Credit Information Company. In the event the customer settles his/her dues after having been reported as defaulter, the card-issuer shall update the status within 30 days from the date of settlement. Card-issuers shall be particularly careful in the case of cards where there are pending disputes. The disclosure/release of information, particularly about the default, shall be made only after the dispute is settled. In all cases, a well laid down procedure shall be transparently followed and be made a part of MITC.


Would this mean that if someone pays after the due date and grace period but before the 7 day notice period, they would not be reported as a defaulter.

I think, if you miss a monthly payment once for a few days doesn't come under "Default".
The hierarchy goes like this: Missed payments - > Delinquent account -> Default, depending upon how long you haven't paid your dues...
I don't know the exact definitions and time periods for these classifications. It is just to give a general idea..

The directive 12(b) you are referring to, would come into effect once the account is classified as a "Default Account" which is far a way down the line, not just for a single missed payment for a few days..( probably some months)

 

[Pankhuri]

For how many days? A friend is going through this issue with sbi. He met with an accident around the due date and missed the payment. Then paid back the while amount after 15 days. SBI reported to cibil and his score dropped by 90. Happened in April this year.

even after the due date, banks don't report you as a defaulter only if you paid the full outstanding.

 

[irohitpragya]

For how many days? A friend is going through this issue with sbi. He met with an accident around the due date and missed the payment. Then paid back the while amount after 15 days. SBI reported to cibil and his score dropped by 90. Happened in April this year.

3 Days

As per RBI's Master Directions - Credit Cards and Debit
Cards- Issuance and Conduct Directions,2022
A credit card account will be reported as 'past due' or
penal charges levied, if any, only when the account
remains 'past due' for more than three days
Which means that if you make your payment within 3
days after the due date there would be no penal
charges applied.

 

[SSV]

I would like to know that all the banks do considers refund as payment or not since I have been charged with the late payment fee on my SBI credit card but as per RBI guidelines, it should be considered as payment and should be adjusted with the last statement.

After having a look into the mentioned RBI guidelines: one thing is very clear that there is a guideline to treat these merchant refunds as a payment if it is received before the due date.This guideline is effective since 1 July 2022. It is just there in Black and White here

However, I have received this email communication from the ICICI Bank regrading a refund on 19th Feb 2023 which is clearly a blatant non compliance of the aforementioned RBI guidelines..



What baffles me is that , if there is any guideline that actually favours the Bank, then they will work on a war footing to change their systems to implement those guidelines and annoy and harass the customers citing the RBI guidelines.

On the other hand, if there is any regulation that favours Customers and not in the best interests of the Bank , as in this instance, the banks are taking way too long to implement well past over the effective date and in a quite blatant manner (sending official emails)

To remedy this, customers have to report to the RBI, and the RBI have to probe and may/ may not penalise them later.. meanwhile customers have to suffer a lot during this whole episode..

The ideal solution could be:

All Banks must have a seperate RBI Compliance officer (exclusively for cusotmer favouring provisions) and make them provide an indepent report to the RBI every quarter or so. This assuming they already have RBI compliance officers ( which looks like there currently care for only the Bank favouring.
provisions)..

So an exclusive compliance officer to look after customer favouring guidelines hired by the Bank with their funds reporting to the RBI is the need of the hour.....