I was indeed shocked when I found that my CIBIL score was way below the recommended 650. A quick check revealed that a write off has been posted by one Axis Bank for a Credit Card Account that I held 4 years ago.
So, here is the scoop, as I dug through all mails and affairs of the past, I found out that the disputed amount is for an Annual fee that the Bank Charged. The Credit Limit amount on the Card was INR 51,000. The Annual Fee was 224.72/-
As I was not using the card, I had requested for a cancellation of the in August and a Pro-rata refund of the annual Fee. To my chagrin, I was refused any refund and said that either I must pay in full irrespective of whether I cancel the card or not.
I had gone ahead and paid that amount with the expectation that all is settled until one fine day I found out from my CIBIL score which was early last year in 2016.
What seems to have happened was I had Paid an amount of 224.70/- instead of 224.72/- I suppose a rounding mistake on my part. The 0.02 paisa that had short triggered a delinquency process in the Axis Bank systems.
It looks like they have sent credit card statements to me for the 0.02 paisa which I had ignored as ridiculous has come to bite me back in full form.
After checking with the support team, here is what I came to know:
Response #1
I understand that you are inquiring about the credit card.
Our record shows that there is an total outstanding due of Rs.0.02 Paise as on now. Kindly arrange to clear the due (You can make 1 rupee of payment).
I would also like to inform you that your credit card is in written off status. In order to remove the written off status on CIBIL records, you have to make the certain amount as CIBIL masking amount
Response #2
In order to update your card account status as Closed in CIBIL, you need to make the payment towards the total outstanding amount due along with the charges which were not levied for the period (agent to mention the duration) your card was written off.
Once you have made this payment your credit account will be closed and your CIBIL score will also be updated accordingly.
The Irony
The Irony in all of this is that, Axis Bank has followed me for 4 years to recover a 0.02 paisa due on an annual fee for a Card which I did not use and has also damaged by CIBIL score on account of this but look at this
Axis Bank says it has outstanding loans of Rs 1,843 crore as of end-June to 12 companies in the latest RBI list of defaulter companies.
This $288 Million is just the tally of Axis Bank, the other banks that are on the hook are because of:
Now what is the government doing about this? The government has embarked on a two-pronged strategy in this regard. On the one hand, the government has brought in the Insolvency and Bankruptcy Code which provides for a time-bound insolvency resolution process. The Reserve Bank of India has already identified 12 accounts adding up to 25 per cent of the NPAs for insolvency proceedings. Another 29 companies also identified by the Reserve Bank of India are set to head to the bankruptcy court.
On the other hand, the Union Cabinet, in October, approved a Rs 2.11 lakh crore recapitalisation plan for state-run banks. Of this, Rs 1.35 lakh crore will be raised through recapitalisation bonds and the remaining through budgetary support and market borrowings. The accumulated NPAs in the Indian banking system have crossed a staggering Rs 8 lakh crore.
and further on read this
According to the American agency S&P-owned Crisil, tepid investment growth and the high level of NPAs are the two uncertain factors clouding the outlook on India achieving a Gross Domestic Product (GDP) growth rate of over 7 percent in the next fiscal.
“Banks will need to take a haircut of up to 60 percent to resolve the issue of NPA,” Crisil Chief Analytical Officer Pavan Aggarwal said at an editor’s meet organised here by the company.
I wonder what a haircut of 60% means for us as Bank’s Customers. As always it is the middle class that will have to subsidise the poor and also pay for the mistakes of the Rich.!
Sriram, Balaraman
Journey of Learning 
Leave a comment