Credit card use in India lowest in world- Article

priyanka1987

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Credit card use in India lowest in world



Indians are still not sure of the plastic money. Credit cards spend as a proportion of the total expenditure by Indians is one of the lowest in the world. While Indians swiped plastic money worth $6 billion in 2006, credit card users in Korea cumulatively spent $136 billion.

Indians spend just 1% of their total purchases through credit cards while the Koreans make one-fifth of their total purchases through credit cards. The world average hovers around 9%.

“The very low levels of penetration in India offer immense potential for credit card companies. Also, there are fewer credit card companies than those in other parts of the world. The high growth in spending is attracting a lot of entrants into the segment,” said SBI Card CEO Roopam Asthana.

What is drawing a large number of companies and financial institutions including Life Insurance Corporation of India (LIC) to India is the 61% year-on-year growth being witnessed in retail spending, the highest in the world.

Interestingly, even among the rich, credit card ownership in India is the lowest in the world. While 90% of the affluent in Hong Kong have credit cards and the corresponding figure for Sydney stands at 87%, in India, only 28% of the affluent have credit card.

Manila, Jakarta, Taipei , Hong Kong have 48-76% of the affluent population owning credit cards, according to Visa research in Asia. Seoul has 84% of its affluent population owning a credit card. Korea, however, has a history of defaults on credit cards where the government had to bail out the credit card companies.

Sources in the industry say with such low penetration levels there are at least half a dozen companies that are looking to roll out credit card operations in India. AIG, Barclays, and LIC are some of the companies eager to enter the Indian market. Punjab National Bank (PNB) is also learnt to be in negotiations to launch another credit card.

While PNB is still in talks with financial institutions, Barclays has rolled out some of its products even as it continues to negotiate with players for future product offerings. Unlike the retail banking segment where Indian banks dominate the market, in the credit card space, foreign banks have managed to garner a sizeable chunk of the pie.

This is largely due to the fact that while the Reserve Bank of India has imposed many restrictions on foreign banks, there are no restrictions on credit card companies. Citibank, ABN Amro, HSBC and Standard Chartered are some of the foreign banks that have a significant India portfolio.

“Foreign banks have a sizeable presence in the credit card space even as there are RBI restrictions in retail banking ,” said ABN Amro Bank ED & Head (Consumer banking), Sumant Kathpalia.


Regards,

Priyanka
 

jiten005

Banned
Credit card use in India lowest in world



Indians are still not sure of the plastic money. Credit cards spend as a proportion of the total expenditure by Indians is one of the lowest in the world. While Indians swiped plastic money worth $6 billion in 2006, credit card users in Korea cumulatively spent $136 billion.

Indians spend just 1% of their total purchases through credit cards while the Koreans make one-fifth of their total purchases through credit cards. The world average hovers around 9%.

“The very low levels of penetration in India offer immense potential for credit card companies. Also, there are fewer credit card companies than those in other parts of the world. The high growth in spending is attracting a lot of entrants into the segment,” said SBI Card CEO Roopam Asthana.

What is drawing a large number of companies and financial institutions including Life Insurance Corporation of India (LIC) to India is the 61% year-on-year growth being witnessed in retail spending, the highest in the world.

Interestingly, even among the rich, credit card ownership in India is the lowest in the world. While 90% of the affluent in Hong Kong have credit cards and the corresponding figure for Sydney stands at 87%, in India, only 28% of the affluent have credit card.

Manila, Jakarta, Taipei , Hong Kong have 48-76% of the affluent population owning credit cards, according to Visa research in Asia. Seoul has 84% of its affluent population owning a credit card. Korea, however, has a history of defaults on credit cards where the government had to bail out the credit card companies.

Sources in the industry say with such low penetration levels there are at least half a dozen companies that are looking to roll out credit card operations in India. AIG, Barclays, and LIC are some of the companies eager to enter the Indian market. Punjab National Bank (PNB) is also learnt to be in negotiations to launch another credit card.

While PNB is still in talks with financial institutions, Barclays has rolled out some of its products even as it continues to negotiate with players for future product offerings. Unlike the retail banking segment where Indian banks dominate the market, in the credit card space, foreign banks have managed to garner a sizeable chunk of the pie.

This is largely due to the fact that while the Reserve Bank of India has imposed many restrictions on foreign banks, there are no restrictions on credit card companies. Citibank, ABN Amro, HSBC and Standard Chartered are some of the foreign banks that have a significant India portfolio.

“Foreign banks have a sizeable presence in the credit card space even as there are RBI restrictions in retail banking ,” said ABN Amro Bank ED & Head (Consumer banking), Sumant Kathpalia.


Regards,

Priyanka

Hey friend, i would like to tell you that you are doing very nice work and i really appreciate it. Well, i have also got some important information on Credit card use in India and would like to share it with you which would help many people here.
 

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