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Defaulters Beware

Salaries of people who have defaulted on credit card payment are not safe now

Credit card defaulters beware. Banks have now started arming themselves with new tools through which they can tighten the noose around those credit card customers who have outstanding dues on their cards.

Leading the way is ICICI Bank, India’s largest private lender, which has already unveiled the new feature. From now on, the outstanding amount that cardholders owe to banks, on which they have defaulted on payment, will be cut directly from their salaries, reports Economic Times.

Although other banks too are expected to follow in ICICI Bank’s wake, the new clause would allow banks to debit such amounts and it would continue till the entire dues are recovered. According to the new ‘terms and conditions’ introduced by the bank, the latter would be all powerful to seek such deductions to the extent that neither any law nor contract, which governs the cardholder or the employer, can stop it.

Bank officials say that prior notice has already been given to all customers so that they are aware that such a clause is being introduced. The new clause which has come into effect from July 23, 2009, is however only applicable to those card holders who default on their credit card payments. The regular customers need not worry, bank officials maintained.