Credit card payments come with their own horror stories but even by those standards what is happening to Chandrakant V. Telkar is unheard of. The senior citizen fell ill last week after being slapped with a credit card bill of Rs 3.2 crore by Citibank on a card that had a limit of Rs 30,000 and which had been discontinued by the bank way back in 1996.
Mr Telkar at first thought the letter asking him to pay up crores might have been an erroneous communication on the part of the bank, but his smile soon vanished when the bank told them that there was no mistake. To add to the fright for Mr Telkar, the bank sent a legal letter as well asking him to attend a camp to amicably settle the amount or face the bank in court.
“I got a shock when I received a letter from Citibank’s lawyers stating that I am supposed to pay them Rs 2,79,90,748.00 as an outstanding bill,” said Mr Telkar. According to the bank, the sum had accumulated over the past 12 years in interest, non-payment charges and other relevant charges on the outstanding amount.
Mr Telkar said, “The letter stated that I should attend some camp and can do the settlement with the bank,” he added. “They also said that if I don’t settle amicably then they would take legal action against me,” added Mr Telkar. From around 1990, Mr Telkar possessed a Citibank credit card whose upper limit was 30,000. In 1996, Mr Telkar’s card was suspended by the bank for non-payment of bills. “I had purchased goods worth around Rs 25,000 at that time,” said Mr Telkar.
“The bank people have been harassing me for the past five years and have even sent recovery agents to my doorstep,” said Mr Telkar. “In 2005 too Mr Telkar was threatened and harassed by the bank’s recovery agents. I had sent a notice to the Colaba and Pune police stations, but no action had been taken,” says Mr Telkar’s lawyer Sajid Shamin. “When I asked the bank how can they say that I owe them Rs 3 crore when my upper limit is only Rs 30,000, the bank told me that this is how the card facility functions. If I was a defaulter of such a huge amount, why did they keep quiet for so many years,” he asks.
Mr Godwin Chellam, head of corporate affairs, Citi India, responds: “As a part of the process to recover longstanding dues, Citibank invites its customers to reconciliation discussions on settlements. This provides an opportunity to delinquent customers and the bank to settle outstanding dues on mutually acceptable terms, prior to the initiation of any legal proceedings.
Recent RBI guidelines and court observations also encourage this practice. There are contact numbers provided in the letter for the purpose of providing assistance and necessary clarification to customers. “In this specific case, the customer has been delinquent on his credit card since February 1996. He had been invited to reconciliation discussions but has so far not accepted our proposal. Over the past 12 years, interest, no payment charges and other relevant charges accrued on the outstanding amount. The client has not been contactable for several years.”