India's Supreme Court has stayed a lower court's verdict that would have capped credit card interest rates at 30%.
The high court said Tuesday that banks would be allowed to charge their current rates until the case is resolved.
Units of Citigroup Inc., HSBC Holdings PLC, American Express Co., and Standard Chartered PLC have challenged an order from India's National Consumer Disputes Redressal Commission, arguing that only the Reserve Bank of India can fix rates there.
R.S. Suri, an attorney for Citi, said the financial companies were not involved in unfair trade practices, as defined by Indian law, because customers signed agreements with the card providers after reading the terms and conditions.
The card issuers said in their petition: "The order of the national commission has far-reaching financial implications in the credit card business, since the rate of interest charged for a particular credit facility is … driven by costs, including cost of funds, cost of credit, the risk factor, [and] expenses incurred for providing the facility."
If interest rates were restricted as ordered by the commission, banks would face significant losses, and the restrictions could threaten the viability of the credit card business, the petition said.
The commission had said charging customers higher interest rates for failing to make full or partial payments on time was an unfair trade practice.