Coronavirus has wreaked havoc all around the world. The pandemic has triggered a major economic crisis that will burden our societies for years to come.
Bank customers that own credit cards are struggling to make their due payments in the wake of multiple issues with online payments.
A majority of credit card users are avoiding visiting branches but are trying to use digital banking channels for the payments against the credit they used within the deadline.
A credit card user of Standard Chartered was unable to pay his bill through Askari Online banking. When contacted, Standard Chartered bank stated that there was no such problem in their system. If the issue is not fixed, the customer of this bank is likely to pay extra charges on the account of markup and financial charges.
Banks in Pakistan usually give a maximum of 20 days to avoid markup to their customers with some banks giving 15 days.
A section of customers who did not receive their salaries or got laid-off by their employers is also facing hardship these days. They will have to pay the extra markup due to the prevailing situation of lockdown to prevent Coronavirus from spreading.
There are 1.6 million credit cards issued by various banks in Pakistan. According to the State Bank of Pakistan, banks issued loans of nearly Rs. 50 billion to customers against credit cards by the end of 2019. Banks’ non-performing loans against credit cards surged to over Rs. 2.6 billion.
The markup charges on credit cards vary demanding on the amount and period. Usually, the markup charges on credit cards stand up to 25 percent.
State Bank of Pakistan (SBP) earlier instructed banks not only to facilitate customers through uninterrupted banking services but also to encourage them to use different modes of digital banking. Banks should fix the issues of the online payment and also develop alternate measures for the customers such as payment of credit cards through mobile apps.
Also, the central bank should instruct banks to ease off the deadline of the payment against the credit cards in the prevailing lockdown to relax the burden of high-interest rates.