Wednesday, May 07, 2008

586 % Per Annum – New Age Money Lenders

Yes, if you thought money lenders were a rarely found species and is only found in rural interiors then you were wrong. The cheat poor farmers, by charging them interest rates as high as 50% per annum then you are again wrong. I, simple supply chain consultant was duped by my financer to pay an interest at a simplistic rates of 586.1064% per annum, yes I am not joking. If you think it is funny then its not and yes I never cheated in any of my exams; I am not an illiterate but just missed the fine print you know.

As my mom always complains that I don’t listen to elders; seems quite true in this case. When I completely misunderstood the ad for the State Bank of India, which said it aloud umpteen number of times through out the day “Only Banking and Nothing else” I didn’t got the hidden warning that I should not use any other Financial Product from SBI except banking and yes I became a proud owner of a Gold Credit Card of SBI. A genuine customer who always paid his bills on time; and in comes the creepy money lender worried about how he will earn if the bills are all cleared in time. This time he decided to roll his sinister plans against this bachelor guy in Hyderabad.

The guy always had the habit of paying the bills in the 1000s the pattern was being observed by the money lender. He used to pay 7000 when the bill was 6600, used to pay 12000 when the bill was 11200. This time he paid a mere 15,000 of his bill of 15,643.46 and the eyes of the shylock oops the money lender shone with greed and he appropriately charged an interest of 314.28 from the guy.

Yes the money lender was SBI Credit Cards, one firm which I had immense trust on because of their banking history in my family. And the guy was me who had to pay an interest of Rs. 314.28 per month on and outstanding sum of Rs. 643.36. And yes they never forgot to charge the Rs. 38.85 of taxes to the government. Eventually I paid up an interest at the whooping rates of 586.1064% per annum. Yes I got my credit card closed immediately and vowed that I would never do any business with SBI cards people.

For all those who are applying for the credit cards from SBI, they have a policy that in case of a part payment the interest is charged on the complete bill amount instead of the amount due. So for example if on bill of Rs. 1,00,010 you pay Rs. 1,00,000 and Rs 10 are remaining as a balance. Then at the gold card interest rates they will charge you an interest of something over Rs. 2000 over the due Rs. 10. That might just amount to an interest rates of 2,41,082.2% annum. I am sure there isn’t a profitable business in the world than this new age money lending.

Posted by Prats at 1:07 AM