The Supreme Court of India on Friday set aside a judgment passed by the National Consumer Disputes Redressal Commission, or NCDRC, which had attempted to cap interest on credit card dues at 30% per annum. The apex court said such regulatory decisions were for the Reserve Bank of India and not for consumer forums, emphasizing judicial restraint in matters involving financial policies and regulations.Background of the Case The case arises out of a complaint filed by a credit card holder aggrieved of the exorbitant interest rates charged by the banks on the overdue payment. The NCDRC held in its order that any interest rate over 30% on credit card dues is "excessive" and "unconscionable." The NCDRC therefore directed the banks to cap the interest rate at 30%, relying on the principles of consumer interest and fair practice. The interest was reversed because all the banks and financial institution pleaded that the NCDRC has no jurisdiction to declare such caps, for it was the RBI who administered the interest rates of credit card under the Banking Regulation Act, 1949. Observations of the Supreme Court The Supreme Court bench of Justice Sanjay Kishan Kaul overruled the order from the NCDRC and made various important observations: Jurisdictional Overreach: The court held that NCDRC had overreached its jurisdiction in disturbing a subject matter that came under the RBI, being the only statutory authority that prescribes the banking practices and interest rates. Contractual Agreements: The bench pointed out credit card agreements are essentially contractual and consumers enter into them agreeing to the terms, including interest rates at the time of issue. Consumer Protection vs. Regulatory Framework: It held that the consumers were being exploited, but that required protection needed to be in the framework of the regulatory mechanism and could not act as an override of the same. Judgment and Its Aftermath The Supreme Court upheld a judgment that overruled the NCDRC ruling, allowing banks to levy interest rates based on RBI rules and conditions of their agreements. It restates that only RBI acts as the bank's solitary regulator and forbids Consumer Forums from interfering in big-ticket financial policies. Ripple Effects of the Decision Sense of Clarity in Authority: The verdict establishes clarity that monetary and banking policy is exclusively in the jurisdiction of RBI. Consumer Awareness: Through this verdict, consumers should read credit cards terms and conditions before signing agreements on them. Banks' Stability: Such verdicts avoid ad-hoc control of interest rates and keep the environment predictable for the banks. The verdict strikes a balance between consumer rights protection and sanctity of regulatory mechanisms, which further strengthens the role of the judiciary in institutional integrity.