Axis Bank Demands Payment For Reward Points Glitch, Threatens Legal Action

Recently, Axis Bank has sent emails to numerous customers regarding the alleged misuse of its credit card reward points system in 2023. The issue stems from a technical glitch that prevented the bank from reversing reward points on cancelled transactions, leading to significant exploitation by some credit card users.

What Happened?

As you may know, banks allocate reward points to customers based on their transaction amounts-the higher the spending, the more reward points earned. However, if a transaction is cancelled or refunded, the corresponding reward points are supposed to be reversed. In 2023, Axis Bank failed to properly reverse these reward points from multiple customer accounts, creating an opportunity for customers to accumulate points unfairly.

How Customers Took Advantage Of The Glitch?

This technical lapse particularly benefited users of premium Axis Bank credit cards-including Axis Magnus, Axis Atlas, and Axis Reserve-which offer high reward transfer ratios. Many customers exploited the loophole by making high-value purchases on e-commerce platforms, earning lakhs to crores in Edge Reward Points, and then cancelling their orders. While the bank refunded the full transaction amount, it failed to deduct the earned reward points, allowing customers to redeem them without any actual spending.

This issue persisted for several months and continued until January 2024, as noted by Sumanta Mandal, Founder of TechnoFino.

Axis Bank's Response: Legal Threats For Non-Payment

In February 2025, Axis Bank sent an email to affected customers, stating, "Due to a technical issue, EDGE REWARD points corresponding to cancelled/reversed/EMI transactions on your Axis Bank Credit Card/s during April'23-Jan'24 were not reversed. These points have now been deducted from your EDGE REWARDS account."

Additionally, the bank threatened legal action if customers failed to settle their negative Edge Points balance. The email further mentioned that customers were required to repay the equivalent amount in cash at a rate of 1 Edge Point = Rs 0.40.

Axis Bank justified this action by stating that, as part of its routine process to detect unauthorized transactions and improper card usage, it identified irregularities in the way Edge Reward Points were earned and redeemed. The bank argued that these transactions were made to gain points in a manner not aligned with the bank's most important terms and conditions (MITC).

Customers were informed that, "Since you redeemed X excess reward points beyond what was rightfully accrued by your transactions, we request you to pay INR Y to the bank as per the MITC clause."

The bank urged affected customers to settle the balance immediately to avoid legal consequences.

Raising Questions: Is Axis Bank Acting Fairly?

In a blog post, Sumanta Mandal raised serious concerns about Axis Bank's handling of the situation. He pointed out that

Retroactive Application of New Terms

• Many affected customers had closed their credit cards in 2023 or early 2024, when the MITC did not include such terms regarding negative reward points.
• Despite this, Axis Bank retroactively applied new rules from 2024, debiting reward points from even closed card accounts.
• Now, these customers are being asked to pay in cash or face legal action. But can a bank legally enforce terms that did not exist at the time the account was active?

RBI's Inaction On Customer Rights Violations

• Mandal questioned why the Reserve Bank of India (RBI) has not taken any action against Axis Bank, despite the bank's clear violation of customer rights.
• He emphasized that Axis Bank's credit card reward system has repeatedly faced technical glitches, yet no regulatory intervention has taken place.

Inconsistent Reward Point Pricing

• Axis Bank has previously stated that each reward point is worth Rs 0.20.
• Now, the bank is demanding Rs 0.40 per reward point when requesting payments from customers.
• This sudden price hike raises further concerns about transparency and fairness.

While Axis Bank may argue that it is trying to rectify a financial loss, its approach has raised ethical and legal concerns. This issue has also sparked widespread debate among banking customers, and many are awaiting clarity from regulatory authorities like the RBI.