In their constant pursuit of recovering dues from credit card customers, banks are empowering themselves with a tool that allows them to ask employers to deduct the outstanding amount from the salary.
Employees who may have defaulted on payment, however, cannot object to this deduction of dues at source, according to the new clause introduced in the ‘terms and conditions’ by the country’s largest private sector lender ICICI Bank and expected to be adopted by others as well.
Such deductions will be remitted to the bank and will continue till the entire dues are recovered.
The amended ‘terms and conditions’ say that “no law or contract” governing either the card holder or employers prevents the bank from seeking such deduction and subsequent payment by the employer to the bank.
When contacted, an ICICI Bank spokesperson confirmed the new clause. “This clause is applicable only for customers who default on their credit card payments. Prior notice has already been sent out to all customers to make them aware of this clause,” the spokesperson said.
“Only the defaulters in repayment need to be concerned and it is not of concern to regular customers,” he added.
With this clause, ICICI Bank is now “entitled and authorised to contact and require the card holder’s/card member’s employers to make deduction/s from the salary/wages payable by the employer to the card holder/card member and to remit the same to ICICI Bank until all of the card holder/card member dues outstanding from the card holder/card member to ICICI Bank is/are completely discharged.”
Besides, as per the new clause, it would be the bank which would decide upon the quantum of the deduction.
“The deductions shall be of such amounts, and to such extent, as ICICI Bank may communicate to (and instruct) the card holder’s/card member’s employers,” says the revised terms and conditions of the bank.
“The card holder/card member shall not have, or raise/ create any objections to such deductions. No law or contract governing the card holder/card member and/or the card holder’s/card member’s employer prevents or restricts in any manner the aforesaid right of ICICI Bank to require such deduction and payment by the card holder’s/card member’s employer to ICICI Bank,” it adds.
The revised credit card terms and conditions, after incorporating the new clause, have come into effect from July 23, 2009.