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The Supreme Court emphasized that the judiciary should not intervene in banking matters, which fall under the jurisdiction of the Reserve Bank of India (RBI).
Case Background
The case arose from banks challenging a decision by the National Consumer Disputes Redressal Commission (NCDRC) that capped interest rates on credit card dues at 30%.
The NCDRC had ruled that higher rates (36%–49%) were "exorbitant" and exploitative.
The Supreme Court overturned the NCDRC's decision, stating that capping interest rates violated the Banking Regulation Act, which grants the RBI the exclusive power to regulate interest rates and banking operations.
The judgment stated that courts should not assume expertise over banking matters or make regulations that fall under the RBI’s responsibilities.
The only role of the courts is to check for abuse of authority.
The Court referred to Section 21A of the Banking Regulation Act, 1949, which prevents courts from scrutinizing or capping the interest rates set by banks, as this is the RBI's responsibility.
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