Need some advice regarding an old Kotak credit card settlement and CIBIL impact.
During COVID, I lost my job and went through a very difficult financial phase. At that time, I had to settle two credit cards because I simply could not manage the payments anymore, one was Kotak Mahindra Bank and the other was Citi Bank.
Now that I’m financially stable again, I started cleaning up my credit profile because I’m applying for a home loan.
I’m already in talks with Axis Bank regarding the old Citi card since they took over Citi’s portfolio, but the bigger issue right now is with Kotak.
The Kotak card had a credit limit of ₹50,000. During settlement back then, I paid ₹35,000 and the account was marked as “Settled.” Now when I contacted them to close/update the account properly, they asked me to pay another ₹52,000.
What confused me is that the card limit itself was only ₹50K, but according to their records, the total outstanding became around ₹87K because of interest charges, late payment fees, penalties, etc.
I tried negotiating with them, but they are not willing to reduce or negotiate the amount.
Since then, I’ve maintained a clean repayment history. I’ve used HSBC and Amex cards responsibly and also cleared personal loans and gold loans without any delays or defaults. There have been no late payments after that COVID phase.
My concern is that this “Settled” status is now creating issues during my home loan process.
I wanted to understand from people who may have gone through something similar:
Can banks legally demand an amount much higher than the original card limit because of accumulated charges?
Since they are refusing to negotiate, can RBI Ombudsman help in such cases?
Would really appreciate practical advice from people who’ve handled similar situations.
Post settlement they sent me a letter which stated -
I also have an official “No Dues” letter issued by Kotak after the settlement in 2021. The letter clearly states that:
“the outstanding balance against the aforesaid Credit Card is zero as on date and there are no further dues payable by you.”
TL;DR: Lost my job during COVID and settled Kotak + Citi credit cards. Kotak card limit was ₹50K, I settled for ₹35K and received an official “No Dues” letter stating there were “no further dues payable.” Now while applying for a home loan, Kotak is still showing the account as “Settled” on CIBIL and is demanding another ₹52K to update/close it, saying total dues became ₹87K due to interest and penalties. They are refusing to negotiate. Looking for advice on whether RBI Ombudsman can help and if anyone has dealt with something similar.