Standard Chartered India’s Credit Card Billing Software is having faulty ‘system logic.’ Charges interest when it should not.

We are here giving you a classic example of how a leading multinational bank is having a secret trick (they call it ‘system logic’) in it’s credit card billing software. This system logic is configured in such a way that it will NOT transfer any credit balance available in your Primary Credit Card to your Supplementary Card even if you are getting a combined statement every month and pay the Total Amount Due as shown in their Payment Coupon. The Total Amount Due is shown in the statement after deducting the credit balance. But the bank officials are not bothered to explain that. Just have a look at the following statement.

The cardholder had spent INR 8453.52 on July 17, 2020 on an item which was returned. This expense was covered in the JULY Statement dated 19th July. As a result a refund of INR 8453.52 was received. This refund is recorded in the SEP Statement dated 19th Sept. The statement shows that this refund was received on July 18, 2020 (i.e. before the JULY Statement date of July 19th. It is strange that the credit for the refund was not passed on in the JULY Statement itself. Hence the credit balance of the cardholder of this refund is with the bank from July 18th. According to the bank this credit balance doesn’t get automatically transferred to the Supplementary Card for paying towards the expenses incurred through the Secondary Card.

Background information provided by the cardholder

Statement dated 19 AUG; Due Date 6 SEP
Total Payment Due as shown in the payment coupon INR 1176.85;
Minimum Payment Due INR 250.00

The Credit balance of INR 3,048.67 is lying in the Primary Card account from July 18, 2020 as shown in the above statement. But the bank would not use it for paying the Total Amount Due in the Supplementary Card’s August 19 Statement. The bill for July was dated 19th July.

As told by the cardholder

The card holder paid INR 1180 (to round off the figure) against the Total Amount Due INR 1176.85 on 4 Sept. which is reflected in the September month’s statement.

Now can anybody imagine that the payment paid was NOT as per the Bank’s statement? Was it a partial payment? Should there be any interest charges levied in the next month’s statement in the above case? It is not only shocking but beyond any one’s imagination.

Now let’s have a look at the statement dated 20 SEP having due date of 8 OCT.

On receipt of the e-statement on 20 SEPT, the card holder complained about the interest charged saying that he paid the Total Amount Due as shown in the AUG Statement. This was his first email which is reproduced below:

The card holder thought it was perhaps a mistake and accordingly wrote the above letter on the day the statement was received. But on 22 SEP, he received two system generated replies and the third one from the customer care officer which was much more shocking for him. Here are the replies received:

This autogenerated reply says that the card holder’s fee waiver request (?) has been submitted for processing. Their system seems to be quite intelligent. From the card holder’s complaint email letter it automatically recognized that it was for a fee waiver! The email was sent for processing without even any human involvement. This reply’s time stamp shows 17.53 dtd. SEP 22. In next two seconds (at 17.55), the card holder gets 2nd reply (system generated) informing him that his fee waiver request has been approved and processed. Not only that, the system replies that “If any trailing interest would be levied in your subsequent statement, the same would be proactively waived off and the credit would reflect in your next statement generated.”

What an impressive high-tech process of waiving off the fee charged by the bank. Absolutely without any human involvement. Surely, the bank must be using an advanced Artificial Intelligence technology.

Now comes the third reply coincidentally with the same time stamp as that of second one i.e. 17.55 (Only the bank can explain how this can happen). This reply has a name of the customer care officer but the reply is quite vague. However, when understood clearly, it is alarming for the card holder. It should be equally disturbing for all those who have either experienced this situation or have missed to notice and have probably paid such unscrupulous fees. There no documentary evidence to show that such a charge can be levied. Have a look at the third answer from the bank.

The above response is totally baseless. Nowhere they have mentioned such a rule. The August Payment Coupon as shown above (full statement); below: only payment coupon. The payment was made as per the statement.

The bank has NOT mentioned anywhere that the cardholder has to pay INR 4225.52. The above coupon clearly shows that the system has deducted the credit balance of INR 3,048.67 from the Supplementary Card’s total dues of INR 4225.52 and shown INR 1176.85 as the Total Payment Due.

The bank’s only defense is that they have reversed the interest charged and the matter is over. They have failed to answer the cardholder’s specific pointed questions that relate to the mechanism of levying such baseless charges without any rule having any documentary evidence. It seems to be their policy to levy the charges and reverse if any customer objects to it. Those who don’t notice must be ending up paying such dishonest charges.

The Bank’s only defense

Below, we are providing replies received from the customer care of the Standard Chartered Bank. You will find them vague. They are giving varying reasons for such type of charges levied. Just have a look. First card holder’s pointed questions to the bank.

“My precise queries are:

  • You write “We would like to inform that the credit balance available in the primary card will not be automatically adjusted towards the outstanding in linked cards.” I want to know whether this is your current policy? If yes, it’s not mentioned anywhere. It cannot be an error because this can only happen if your billing software is configured like that.
  • My question “Am I supposed to pay for the each card – Primary and Supplementary – separately?” remains unanswered.
  • Did I violate any of the T&C by paying Rs. 1176.85 for the statement dated August 19, 2020 which led you to impose the interest of Rs. 353.01? You have considered Rs. 1176.85 as a part payment. Why?

These are straight questions arising out of your communications with me and are concerned with your policy. You should be frank and honest enough to let me know the answers to the above questions.

But the bank customer care officers have varying answers. One such imaginative answer came from their social media team. She perhaps had no knowledge about my other communications with the bank but her reply shows that she was quite authoritative and confident. Look at it below:

Different Reason: The payment apportionment was not processed due to different payment due date across your card accounts. Hence, as per system logic the payment not apportioned. Laughable! The due date is same. The cardholder gets combined statement as shown above.

Cardholder’s response to the above reply of the bank:

The reply to the above email was an assurance not the clarification sought. Not bad! This letter from the bank also indicates that the practice of NOT transferring the credit balance to clear the balance in the associated card is a normal one. It’s a rule not an exception.

So, the bank says it’s internal teams have been asked to assess cardholder’s ‘valuable inputs’. The bank considers serious complaints of it’s customers merely ‘valuable input’ for further assessment by their internal committees! The cardholder replies back and requests to provide reason for the charge levied not assurance. They seem to be hiding something. Something they are doing that they shouldn’t. More likely, they can’t.

Another customer care officer explained how the cardholder’s Primary Card credit balance shown in the AUG Statement was used. She doesn’t bother to tell why this balance was NOT transferred to the Supplementary Card to settle the outstanding. In fact, according to her, the Primary Card was practically converted to a Debit Card because the credit amount was adjusted towards the purchase done in the Primary Card.

The bank will allow the credit balance of Primary Card only for purchases in that card. This converts the Credit Card into a Debit Card.

Tired with different answers, the cardholder wrote he wants to know under which rule the interest was levied.

The Trailing Interest: Now the cardholder receives OCT Statement and came across what is trailing interest, something he never heard about. In one of the responses this word was mentioned but the cardholder’s notion was that the bank would take proactive action so that the matter of interest charge in the SEPT Statement was settled. The matter of clarification of the charge levied, however, was open and the cardholder’s expectation was that the bank should voluntarily accept the shortcoming in it’s billing software (the so called ‘system logic’ which functioned illogically) and make the necessary disclosures accordingly which might involve refund of such fees levied and collected from different cardholders. In response to the cardholder’s inquiry about the trailing interest, he got the following reply. First the OCT Statement then the communication:

The cardholder sent an email complaining about the above interest charge in the OCT Statement. He came to know later that the bank calls it trailing interest.

The response to the above letter was given providing reference to, and covering the original complaint. blah-blah-blah…. They reversed the charge, as usual.

Bank’s roadmap for implementation of payment adjustment from a Card with credit balance before the statement date post April 2021. (Great favour to card customers?)

We wish to inform you that the said change for payment adjustment from a Card with credit balance before the statement date is under internal review and the same is part of our roadmap for implementation post April 2021. Until the implementation of the said change, we request you to kindly call the customer care or write to us for assistance in transferring the credit balance to your linked card account.

The very next day, a more creative customer care officer comes with another novel reason for the levy of the interest in the SEP Statement, and for NOT transferring credit balance in the AUG Statement. Please have a look what kind of secretive rules the bank follows which you will not find anywhere including their website.

“We would like to inform that as per the system logic any credit balance available on the card will be automatically transferred to the linked card on the Payment Due Date plus 2 days. In your case, we note that the credit balance of INR 3,048.67 got adjusted towards your purchases made on 21st & 22nd August 2020. Hence, the system has not transferred the credit balance to your supplementary card and owing to partial payment towards the supplementary card dues, the interest of INR 353.01 has been levied in Sep 2020 statement and the trailing interest of INR 191.51 levied in Oct 2020 statement.”

In the above email the customer care officer is more precise with her information as to when my ‘Credit-Card-Turned-Debit-Card’ was actually used i.e. against which purchases the credit amount was used. A new information revealed regarding when the credit amount is transferred! on the Payment Due Date plus 2 days. Wonderful….

“We would like to inform that the system implementation to transfer the credit balance before the statement date is under internal review.

We thank you for bringing this to our attention, as your feedback/suggestion has enabled us to introspect and reinforce our internal efforts in this direction, to avoid recurrence of such instances in future.

We confirm having already reversed the aforesaid charges basis your earlier interaction with us. We sincerely regret the inconvenience caused. We value your relationship with the Bank and assure to serve you with the best of our services at all times.”

Customer Care Officer on 21st October 2020

But in the above email, she refrains to inform me that she herself had written in the email one day earlier (given above) regarding the bank’s roadmap for implementation post April 2021. Checked it was from the same customer care officer.

“We wish to inform you that the said change for payment adjustment from a Card with credit balance before the statement date is under internal review and the same is part of our roadmap for implementation post April 2021.

Until the implementation of the said change, we request you to kindly call the customer care or write to us for assistance in transferring the credit balance to your linked card account.”

The same Customer Service Officer one day before on 20th October 2020

The card holder did send his reply to the above response from the Office Of the Head, Customer Service. But there is no response to that. For the record, the cardholder’s last letter is given below:


From the responses of various customer service officers, following key conclusions may be drawn:

  • The bank seems to be following an unwritten rule or practice of charging interest in situations like the one the above cardholder was facing. A tweak in the billing software in the name of ‘system logic’ gives the bank a way to charge interest when actually they should not. The bank’s policy may be to revert any such charges levied immediately without any argument in the name of ‘service gesture’ to all persons who notice this dishonest charge and complain about it.
  • Another thing that emerges from their responses is that the bank follows an unwritten secretive policy of NOT transferring the credit balance before the statement date. This amounts to ‘wrongful billing’ because there is no explanation or documentary evidence to show that this is a part of the Terms & Conditions. There is totally a blackout on this information that their system is configured to transfer the credit balance only after 2 days from the due date of the payment. In above case the credit balance resulted because of a refund of Rs. 8453.52 on July 18, 2020 but this appeared NOT in the August Statement dated 19th August but in the SEP Statement dated 19th September. The credit has been denied in July and August statements. By not adjusting the credit balance in the August statement expenses of the Supplementary card, the bank has tried to earn an interest of Rs.INR 353.01. This is totally unethical and amounts to a malpractice. There cannot be any justification for levying any charge whatsoever.
  • Although the bank has conveyed to the cardholder that they are considering system implementation to transfer the credit balance before the statement date. But they are NOT admitting that the practice being currently followed is wrong, unwritten and undocumented. There is not a single word on it. Rediculously, they claim that the new system implementation is part of their roadmap for implementation post April 2021! This is height of their arrogance.
  • Their advise “Until the implementation of the said change, we request you to kindly call the customer care or write to us for assistance in transferring the credit balance to your linked card account” also proves that customers can, through verbal or written request, get the credit balance transferred and avoid any penal interest. That means if the cardholder under the present review would have called the bank or written them to transfer the credit available in his Primary Card (as shown in August Statement) to pay for the outstanding in the Supplementary Card and pay off the dues, there would have not been any interest imposed in the September Statement. Such verbal or written request should have been made before the due date which was 6 September.
  • The bank’s above advice is unwritten and undocumented which against the regulatory norms of credit card billing. There is absolutely no way to know that such a practice is being followed by the bank. They have not mentioned it anywhere. Not even on the payment coupon. But there is no way they can do it transparently because it would never be accepted by the customers. Not only that it would be against all norms, rules and regulations. India, too, has strict and effective regulators. No bank should dare to forget this fact.

In short, in this digital world a bank like Standard Chartered is telling it’s customers to give their requests for carrying out a very obvious routine operation verbally or in writing. Their computer system is NOT capable of doing it automatically for them. Very disgusting behavior, indeed.

We are sure that such malpractice going on in one of very reputed multinational banks cannot be tolerated by the concerned regulators.

As of now we have no information if similar practice is being followed by any other bank. If readers of this piece know similar instances of customer abuse, they are encouraged to share the relevant information in public interest.

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