New Delhi, Aug. 29: Citibank today moved the Supreme Court against an order capping the interest rate on delay or default in credit-card payments at 30 per cent.

The order setting the limit had been passed by the National Consumer Disputes Redressal Commission on July 7.

Citibank counsel Harish N. Salve argued that the order be set aside, saying India was an emerging economy and RBI guidelines allowed banks to charge interest based on market rates. The judges, however, said the matter would be heard on September 8.

Till then, however, the apex court permitted all customers who have paid a rate higher than 30 per cent on their card dues after the July 7 consumer forum order to file contempt petitions against the banks involved.

Till July 7, banks had been charging 36 per cent to 49 per cent on delayed payments. The forum had passed the order on a petition by Delhi resident Pradeep Thakur and consumer awareness groups Awaz and Jagrut Nagrik.

“In our view, charging of interest in excess of 30 per cent shall be considered usurious rate of interest and that if such rate of interest is charged, it would amount to unfair trade practice,” the forum had said.

However, it had clarified that the order would not apply to past transactions.

HSBC, American Express Bank, Citibank and Standard Chartered Bank had been made parties to the petition. During the hearing at the forum, the Reserve Bank had said it was left to market forces to determine the credit card interest rates.

The banks argued their rates were steep because of the high rates of default and the lack of information on the credit history of customers.

The forum, however, said the average rate of interest on bank loans was around 15 per cent. Even if an additional 15 per cent were added to take care of the risks and operational costs, the interest rate on card dues cannot exceed 30 per cent.