X user claims HDFC Bank charged over ₹1,200 for a 46-paise credit-card shortfall; know what RBI rules say

A credit-card customer has alleged that HDFC Bank charged him more than ₹ 1,200 after he fell short of his ₹ 10,649.46 bill by just 46 paise. Dr Samir Kagalkar said in a post on X that he paid ₹ 10,649 against the bill, leaving ₹ 0.46 unpaid.

Kagalkar questioned the late-payment charges and other costs subsequently added to his account and asked the bank to reverse them. He also shared the reference number of his conversation with the bank's customer-service team.

The incident has raised questions about how credit-card issuers treat small payment shortfalls and, more importantly, how interest and late-payment charges are calculated when the total amount due is not paid in full.

The Reserve Bank of India (RBI) says that if a cardholder does not clear the total amount due by the payment due date , the interest-free credit period is lost. Interest may then be charged from the transaction date on the outstanding amount, after adjusting for payments, refunds and reversed transactions. RBI specifically clarifies that interest cannot be charged on the total amount due.

Late-payment charges are treated separately. RBI says card issuers can report an account as “past due” or levy penal charges such as late-payment fees only when the account remains past due for more than three days. Such charges must be levied only on the outstanding amount after the due date, and not on the total amount due.

RBI also requires card issuers to specify in the billing statement the level of unpaid amount, beyond the minimum amount due, at which the interest-free credit period will no longer be available. This is important because the total amount due, minimum amount due and outstanding amount are not interchangeable terms.

A small shortfall does not necessarily mean that the customer will automatically incur interest or a late-payment fee. The treatment of minor payment differences can depend on the card issuer's own terms and any threshold it applies.

Aditya Gupta, founder and CEO of novio, said credit-card systems generally account for very small payment differences. A few paise, or even a few rupees, left unpaid is generally not treated as a conventional partial payment and would typically not attract interest or additional charges, he said.

“A small unpaid amount does not necessarily mean that the payment is treated as a partial payment,” Gupta said. However, he added that the exact threshold can vary across card issuers.

This distinction is important because finance charges and late-payment fees are not the same thing. Finance charges relate to the cost of carrying an outstanding balance, while a late-payment fee is a separate penal charge that can apply when the account meets the conditions prescribed by the issuer and RBI.

For credit-card users, the amount appearing as a charge on the next statement therefore needs to be read along with its breakup. The applicable interest, late-payment fee and taxes are separate components and are governed by the card issuer's disclosed terms and RBI's rules.

Kirti Jha is a Senior Content Producer at Mint, where she writes on mutual funds, taxation, personal finance and macroeconomic developments.