Case Study (HDFC Bank) - Salary on Hold

Customer Says:

I have my salary account with HDFC bank, and i also had a credit card from them. In the last year i had become irregular in repaying the credit card dues due to severe illness of my mother. This month the Bank has frozen my salary account and withdrew all the money that I got as my salary without my authorization. I also offered them for a settlement option and repaying the whole amount in monthly installments. However, the collection dept of the bank did not agree to that. I want to know if these banks have got the right to do something like this. And if this is not authorized by RBI what are the actions I can take.

AskPranav Says:

In the Credit Card applications form Terms & Conditions there is a condition whichs says that the Credit Card Bank has a "Right to Lien" on the Salary Account you have with them, which also effectively means that if you do not pay your Credit Card dues, they can deduct the amount from your Salary Account without informing you of the same.

This is a standard practise in most banks where they issue credit cards basis Salary Accounts. I do not think that there is much you / anybody can do as the bank is covered on this.
You can read the Terms & Conditions of HDFC Bank for clarifications. I am sure that the "Right to Lien" clause is included.

For interesting information on Banking and Credit Cards do read the following blog.http://www.simplybank.blogspot.com/

Warm Regards.
Pranav