Description
The study is based on primary data, which has been collected from the credit card users with the help of a well drafted and structured questionnaire (see annexure). For the collection of primary data, we have confined ourselves to Ahmedabad, India. Our sample consists of a total of 150 respondents.
CHAPTER 1
Research Methodology
Objectives of the Project
The primary objective of the report is categorized into following sub-topics:
1. To study the demographic factors of credit card holders.
. To !now the using purpose of credit card by the holders.
". To assess the behavioural changes of credit card holders.
#. To e$amine the consumption pattern of credit card holders.
%. To find out the satisfaction level of e$isting credit card holders.
&. To suggest measures to improve the credit card system in 'ndia
Data sources
Primary sources
(rimary data has been collected through the structured )uestionnaire
consisting mainly of the closed ended )uestions.
Secondary sources
*econdary data has been collected from the internet+ journals+ reference boo!s
etc.
Scope of the study
,ll the )uestions have been analysed by adding up the responses against each
alternative and answers from the various respondents. The collected data has
been subject to statistical analysis to draw inferences and suitable
conclusions. *tatistical tools li!e chi-s)uare and percentage are used. -or
calculating the table value for analysis with chi-s)uare+ %. significance level
is used.
RESEARCH METHODOLOG
The study is based on primary data+ which has been collected from the credit
card users with the help of a well drafted and structured )uestionnaire /see
anne$ure0. -or the collection of primary data+ we have confined ourselves to
,hmedabad+ 'ndia. 1ur sample consists of a total of 1%2 respondents. The
respondents are basically credit card users+ who have been selected by
following the non-probabilistic sampling+ simple purposive sampling and
convenience sampling techni)ues.
-urther+ it is essential to mention two things: firstly+ in convenience-sampling+
respondents /who were seen using3have possession of credit cards0 were
selected because they happened to be in the right place at the right time and
secondly+ convenience sampling techni)ue is not recommended for descriptive
or casual research+ but they can be used in e$ploratory research for the
generation of ideas /Malhotra+ 22%0. The )uestions in)uired the choice of
credit card+ and the users were given 4 statements. 'n addition+ the
respondents had to rate the credit cards according to the importance+ on the
5five-point 6i!ert scale.7
Sa!p"i#$ P"a#
Target (opulation: 8redit 8ard holders
*ample *ize: 122 respondents
*ampling techni)ue: 8onvenience sampling
%e#eficiaries
1. Banks
9an!s may come to !now about the usage pattern of the credit card holders
based on the demographics+ purposes and consumption pattern and may aim to
target new customers based on the derived facts.
2. Probable subscribers
:ew prospects may find it helpful in selecting the credit card company and
the ban! issuing the credit based on the satisfaction level of the e$isting
credit card holders.
3. Researchers
*tudy gives the researchers the insight about the credit card system prevailing
and the usage pattern and satisfaction level of the e$isting credit card holders.
Research Desi$#
The research design that has been used is ;escriptive Research.
? 'nvolves gathering data that describe events and then organizes+
tabulates+ depicts+ and describes the data.
? R of 14.4 percent per
annum during the same period.
'n -?21 the economic slowdown resulted in a >ross ;omestic (roduct />;(0
growth of only &.2 percent as against the previous year7s &.# percent. The H('
'nde$ /a measure of inflation0 increased by C.1 percent as against "." percent in
-?22. *imilarly+ money supply /M"0 grew by around 1&. percent as against
1#.& percent a year ago.
The growth in aggregate deposits of the scheduled commercial ban!s at 1%.#
percent in -?21 percent was lower than that of 1A." percent in the previous year+
while the growth in credit by *89s slowed down to 1%.& percent in -?21 against
" percent a year ago.
The industrial slowdown also affected the earnings of listed ban!s. The net
profits of 2 listed ban!s dropped by "#.#" percent in the )uarter ended March
221. :et profits grew by #2.C% percent in the first )uarter of 222-221+ but
dropped to #.%& percent in the fourth )uarter of 222-221.
1n the 8apital ,de)uacy Ratio /8,R0 front while most ban!s managed to fulfill
the norms+ it was a feat achieved with its own share of difficulties. The 8,R+
which at present is A.2 percent+ is li!ely to be hi!ed to 1.2 percent by the year
22# based on the 9asle 8ommittee recommendations. ,ny ban! that wishes to
grow its assets needs to also shore up its capital at the same time so that its
capital as a percentage of the ris!-weighted assets is maintained at the stipulated
rate. Hhile the '(1 route was a much-fancied one in the early IA2s+ the current
scenario doesn7t loo! too attractive for ban! majors.
8onse)uently+ ban!s have been forced to e$plore other avenues to shore up their
capital base. Hhile some are wooing foreign partners to add to the capital others
are employing the MJ , route. Many are also going in for right issues at prices
considerably lower than the mar!et prices to woo the investors.
'#terest Rate Sce#e
The two years+ post the East ,sian crises in 1AAC-A4 saw a climb in the global
interest rates. 't was only in the latter half of -?21 that the ross
*ettlement /RT>*0 *ystem+ a 8entralised -unds Management *ystem /8-M*0+ a
:egotiated ;ealing *ystem /:;*0 and the *tructured -inancial Messaging
*ystem /*-M*0. *imilarly+ integration of the various payment products with the
systems of individual ban!s has been another thrust area.
An Assessmen!
These reform measures have had a major impact on the overall efficiency and
stability of the ban!ing system in 'ndia. The dependence of the 'ndian ban!ing
system on volatile liabilities to finance its assets is )uite limited+ with the
funding volatility ratio at -2.1C per cent as compared with a global range of
-2.1C to 2.11 per cent. The overall capital ade)uacy ratio of ban!s at end-March
22% was 1.4 per cent as against the regulatory re)uirement of A per cent which
itself is higher than the 9asel norm of 4 per cent. The capital ade)uacy ratio was
broadly comparable with the global range. There has been a mar!ed
improvement in asset )uality with the percentage of gross
,s to gross
advances for the ban!ing system declining from 1#.# per cent in 1AA4 to %. per
cent in 22%. >lobally+ the6 ratio varies widely from a low of 2." per cent to
".2 per cent in developed economies+ to over 12.2 per cent in several 6atin
,merican economies. The reform measures have also resulted in an improvement
in the profitability of ban!s. Ro, rose from 2.# per cent in the year 1AA1-A to
2.A per cent in 22#-2%. 8onsidering that+ globally+ Ro, was in the range -1. to
&. per cent for 22#+ 'ndian ban!s are well placed. The ban!ing sector reforms
have also emphasised the need to review manpower resources and rationalise
re)uirements by drawing up a realistic plan so as to reduce operating cost and
improve profitability. The cost to income ratio of 2.% per cent for 'ndian ban!s
compares favourably with the global range of 2.#& per cent to 2.&4 per cent and
vis-a-vis 2.#4 per cent to 1.1& per cent for the world7s largest ban!s. 'n recent
years+ the 'ndian economy has been undergoing a phase of high growth coupled
with internal and e$ternal stability characterised by price stability+ fiscal
consolidation+ overall balance of payments alignment+ improvement in the
performance of financial institutions and stable financial mar!et conditions and
the service sector ta!ing an increasing share+ enhanced competitiveness+
increased emphasis on infrastructure+ improved mar!et microstructure+ an
enabling legislative environment and significant capital inflows. This has
provided the bac!drop for a more sustained development of financial mar!ets
and reform.
CHAPTER 3
':TR1;enerally+ a time limit of si$ty /&20 days may be given to the customers for preferring
their complaints grievances.
b. The card issuing ban! 3 :9-8 should constitute >rievance Redressal machinery within
the ban! 3 :9-8 and give wide publicity about it through electronic and print media.
The name and contact number of designated grievance redressal officer of the ban! 3
:9-8 should be mentioned on the credit card bills. The designated officer should ensure
that genuine grievances of credit card subscribers are redressed promptly without
involving delay.
c. The grievance redressal procedure of the ban! 3 :9-8 and the time frame fi$ed for
responding to the complaints should be placed on the ban! 3 :9-8Bs website. The name+
designation+ address and contact number of important e$ecutives as well as the
>rievance Redressal 1fficer of the ban! 3 :9-8 may be displayed on the website. There
should be a system of ac!nowledging customersB complaints for follow up+ such as
complaint number 3 doc!et number+ even if the complaints are received on phone.
d. 'f a complainant does not get satisfactory response from the ban! 3 :9-8 within a
ma$imum period of thirty /"20 days from the date of his lodging the complaint+ he will
have the option to approach the 1ffice of the concerned 9an!ing 1mbudsman for
redressal of his grievance3s. The ban! 3 :9-8 shall be liable to compensate the
complainant for the loss of his time+ e$penses+ financial loss as well as for the
harassment and mental anguish suffered by him for the fault of the ban! and where the
grievance has not been redressed in time.
'#ter#a" co#tro" a#d !o#itori#$ syste!s
Hith a view to ensuring that the )uality of customer service is ensured on an on-going
basis in ban!s 3 :9-8s+ the *tanding 8ommittee on 8ustomer *ervice in each ban! 3
:9-8 may review on a monthly basis the credit card operations including reports of
defaulters to the 8'9'6+ credit card related complaints and ta!e measures to improve the
services and ensure the orderly growth in the credit card operations. 9an!s 3 :9-8s
should put up detailed )uarterly analysis of credit card related complaints to their Top
Management. 8ard issuing ban!s should have in place a suitable monitoring mechanism
to randomly chec! the genuineness of merchant transactions.
Ri$ht to i!pose pe#a"ty
The Reserve 9an! of 'ndia reserves the right to impose any penalty on a ban! 3 :9-8
under the provisions of the 9an!ing Regulation ,ct+ 1A#A for violation of any of these
guidelines.
Ho+ credit cards +or&
,n e$ample of the front of a typical credit card:
1. 'ssuing ban! logo
. EML chip
". Pologram
#. 8ard number
%. 8ard brand logo
&. E$piry ;ate
C. 8ardholderBs name
,n e$ample of the reverse side of a typical credit card:
1. Magnetic *tripe
. *ignature *trip
". 8ard *ecurity 8ode
, user is issued credit after an account has been approved by the credit provider+ and is
given a credit card+ with which the user will be able to ma!e purchases from merchants
accepting that credit card up to a pre-established credit limit. 1ften a general ban! issues
the credit+ but sometimes a captive ban! created to issue a particular brand of credit card+
such as 8hase+ Hells -argo or 9an! of ,merica issues the credit.
Hhen a purchase is made+ the credit card user agrees to pay the card issuer. The
cardholder indicates their consent to pay+ by signing a receipt with a record of the card
details and indicating the amount to be paid or by entering a (ersonal identification
number /(':0. ,lso+ many merchants now accept verbal authorizations via telephone and
electronic authorization using the 'nternet+ !nown as a 8ard not present /80
transaction.
Electronic verification systems allow merchants to verify that the card is valid and the
credit card customer has sufficient credit to cover the purchase in a few seconds+
allowing the verification to happen at time of purchase. The verification is performed
using a credit card payment terminal or (oint of *ale /(1*0 system with a
communications lin! to the merchantBs ac)uiring ban!. ;ata from the card is obtained
from a magnetic stripe or chip on the cardD the latter system is in the race periods vary+ but usually range from 2 to "2 days
depending on the type of credit card and the issuing ban!. *ome policies allow for
reinstatement after certain conditions are met. overnment will hold #A. sta!e and private players will hold the rest %1. - the
majority being held by '8'8' 9an! /#.%.0.
Gro+th of %a#&s
P;-8 9an! and ,$is 9an! continue to remain as leaders of the private sector ban!s.
9oth the ban!s have maintained the advances growth and :'M. *9'+ (unjab :ational
9an!+ 9an! of 'ndia and old 9usiness 8redit 8ard
• P;-8 9an! Lalue (lus 8redit 8ard
(C(C( Bank is issuin& 2> seara!e credi! cards in (ndia. These cards ca!er !o a #ide
clien! base includin& sor!s lo'ers and businessmen $or e*amle.
(C(C( Si&na!ure Credi! Card
-ollowing are some points on '8'8' *ignature 8redit 8ard:
• 8ardholders get % points for 'nternational *pends worth ':R 122.
• @oining fee is ':R %+222.
• 8ardholders receive air accident insurance cover worth ':R " crores.
• Renewal fee is ':R +%22.
• 8ardholders receive -ree Helcome gifts of ':R "%+222. (rizes could be Tag Peuer
watches+ Travel (oints or Travel Louchers.
• Regular interest rate and cash advance fees are .C%. per month.
• 8ardholders get points for spending ':R 122 with the card for dining purposes.
• 'ssuer is L'*,.
• 8ardholders receive # points for spending ':R 122 with the card for travel purposes.
• There are 2. fuel surcharge facilities at all outlets.
(C(C( Bank Pla!inum Credi! Card
-ollowing are some features of '8'8' 9an! (latinum 8redit 8ard:
• 8ardholders get access to airport lounges on a priority basis.
• Renewal fee is ':R +%22.
• 8ardholders receive air accident insurance covers worth ':R 1crore.
• Regular interest rate is 1.AA. per month.
• 8ash and credit limits are high.
• 8ash advance fee is ".1%. per month.
• 8ards are only offered via invitation.
• 'ssuer is L'*,.
• @oining fee is ':R %+222.
• There are 2. fuel surcharge facilities.
(C(C( Bank Pla!inum Premiere Credi! Card
• 8ardholders receive personalized concierge services.
• Regular interest rate is .A%. per month.
• 8ardholders receive air accident insurance covers worth ':R #2 la!hs.
• 8ash advance fee is ".1%. per month.
• 8ash and credit limits are high.
• 'ssuer is L'*,.
• @oining and renewal are free.
• There are 2. fuel surcharge facilities at all outlets.
-ollowing are other credit cards issued by '8'8' 9an! in 'ndia:
• '8'8' 9an! Titanium 8redit 8ard
• '8'8' 9(6 ,MH,? 8redit 8ard
• '8'8' 9an! *olid >old /Lisa0 8redit 8ard
• '8'8' 9an! 9ig 9azaar *ilver 8redit 8ard
• '8'8' 9an! *olid >old /Master8ard0 8redit 8ard
• '8'8' 9an! 9ig 9azaar >old 8redit 8ard
• '8'8' 9an! >old ,merican E$press V 8redit 8ard
• '8'8' 9an! Trinethra 8redit 8ard
• '8'8' 9an! Travel *mart 8redit 8ard
• '8'8' 9an! 1rchid ,n Ecotel 8redit 8ard
• '8'8' 9an! >olf 8redit 8ard
• '8'8' 9an! Mohun 9agan 8redit 8ard
• '8'8' Megamart 8redit 8ard
• '8'8' 9an! Ebony 8redit 8ard
• '8'8' R91R "&2 8redit 8ard
• '8'8' 9an! ,irtel *ilver 8redit 8ard
• '8'8' *arovar Potels 8redit 8ard
• '8'8' 9an! ,irtel >old 8redit 8ard
• '8'8' 9an! P(86 *ilver 8redit 8ard
• '8'8' 9an! Toyota 8redit 8ard
• '8'8' 9an! P(86 >old 8redit 8ard
• '8'8' 9an! Thomas 8oo! Titanium 8redit 8ard
• '8'8' (R< 6ife 8redit 8ard
• '8'8' 9an! ,scent ,merican E$press 8redit 8ard
• '8'8' 9(6 Mobile 8redit 8ard
• '8'8' 9an! (latinum 'dentity 8redit 8ard
(n (ndian credi! card marke! !here are 12 ma6or !yes o$ credi! cards bein&
ro'ided by banks and $inancial ins!i!u!ions. These cards ro'ide a #ide 'arie!y o$
$inancial bene$i!s !o holders.
-a6or (ndian Credi! Card Tyes
-ollowing are various types of credit cards available in 'ndia:
• (remium 8redit 8ards
• 8ash 9ac! 8redit 8ards
• >old 8redit 8ards
• ,irline 8redit 8ards
• *ilver 8redit 8ards
• 9usiness 8redit 8ards
• 9alance Transfer 8redit 8ards
• 8o-branded 8redit 8ards
• 6ow 'nterest 8redit 8ards
• 6ifetime -ree 8redit 8ards
• Rewards
There are some additional credit cards that are available in 'ndia as well. Rewards credit
cards available in 'ndia can be subdivided into si$ categories Q (oints+ Potels and
Travels+ Retail+ ,uto and -uel.
A number o$ banks are o$$erin& lo# in!eres! credi! cards in (ndia in order !o
hel !he cardholders mana&e !heir $inances in a be!!er #ay. These cards are
hi&hly a'ailed by (ndian consumers on accoun! o$ !heir lo# in!eres! ra!es.
(C(C( Bank Pla!inum Credi! Card
-ollowing are some salient features of '8'8' 9an! (latinum 8redit 8ard:
• 8ardholders receive priority access facilities to airport lounges.
• Regular interest rate is 1.AA. per month.
• 8ardholders receive air accident insurance coverage worth ':R 1 crore.
• 8ash advance fee is ".1%. per month.
• 8ardholders have higher cash limits and credit limits.
• 8ard issuer is L'*,.
• The card is offered via invitation only.
• 'ssuing ban! is '8'8' 9an!.
• @oining fee is ':R %+222.
• There are 2. fuel surcharge facilities.
• Renewal fee is ':R +%22.
American E*ress (ndian Airlines Credi! Card
,merican E$press 'ndian ,irlines 8redit 8ard has the following salient features:
• The cardholders receive 12. discounts on business class flights and 1%. discounts
on economy flights.
• Renewal fee is ':R "C%2.
• There is a %. discount on super saver fares.
• Regular interest rate is 1.A..
• 8ardholders receive business class upgrades for free.
• 8ash advance fee is 1.A..
• 8ardholders receive complimentary tic!ets.
• 8redit card issuer is ,MER.
• @oining fee is ':R "C%2.
• There are 2. fuel surcharge facilities that can only be availed at P(86 outlets.
HD.C Bank Ti!anium Credi! Card
-ollowing are the salient features of P;-8 9an! Titanium 8redit 8ard:
• 8ardholders receive e$clusive concierge services.
• Regular interest rate is .&%. per month.
• 8ardholders receive rebates at hotels and clubs.
• 8ash advance fee is .%. per month. The minimum cash advance fee is ':R "22.
• There are accelerated rewards programs that are provided on the basis of e$penditure
with the card.
• 'ssuer is Master8ard.
• 8ardholders receive 2. fuel surcharge and balance transfer facilities.
• 'ssuing ban! is P;-8 9an!.
• @oining fees and renewal fees are variable.
-ollowing are some other low interest credit cards that are available in 'ndia:
• P;-8 9an! Lisa *ignature 8redit 8ard
• 9198,R; E$clusive Homan credit card
• P;-8 9an! (latinum (lus 8redit 8ard
• 919,8R; E$clusive ?outh 8redit 8ard
• P;-8 9an! 8orporate 8redit 8ard
• 919,8,R; *ilver 8redit 8ard
• Pero Ponda *9' 8redit 8ard
• 919,8,R; E$clusive 8redit 8ard
• 9198,R; 8orporate >lobal 8redit 8ard
• ,$is 9an! *ecured 8redit 8ard
• :ERT>E: 9198,R; >old 8redit 8ard
• P*98 (latinum 8redit 8ard
• 919,8R; >old Lisa 8redit 8ard
• ?atra 9arclaycard (latinum 8redit 8ard
• 919,8R; >old Master8ard 8redit 8ard
• ,9: ,MR1 (latinum 8redit 8ard
CRED(T CARD .RA;DS
There is an international rac!et of cyber criminals. 8redit card information in 'ndia is
sold to cyber criminals in other countries. The information is misused for carrying out
major financial frauds. . ;ue to lac! of awareness+ people submit personal details and
credit card information to fraudulent emails. *ometimes+ fraudsters steal credit card
information. *ome fraudsters go through trash to find discarded receipts or carbon for
obtaining information and then use the account number illegally.
There were underground FcarderG forums where credit card numbers are bought and
sold. These forums bring together people who steal the numbers and those who use them.
,n individual researcher in cyber crime and cyber laws+ (atil said economic offences
using credit cards have increased in 'ndia and countries li!e
The study is based on primary data, which has been collected from the credit card users with the help of a well drafted and structured questionnaire (see annexure). For the collection of primary data, we have confined ourselves to Ahmedabad, India. Our sample consists of a total of 150 respondents.
CHAPTER 1
Research Methodology
Objectives of the Project
The primary objective of the report is categorized into following sub-topics:
1. To study the demographic factors of credit card holders.
. To !now the using purpose of credit card by the holders.
". To assess the behavioural changes of credit card holders.
#. To e$amine the consumption pattern of credit card holders.
%. To find out the satisfaction level of e$isting credit card holders.
&. To suggest measures to improve the credit card system in 'ndia
Data sources
Primary sources
(rimary data has been collected through the structured )uestionnaire
consisting mainly of the closed ended )uestions.
Secondary sources
*econdary data has been collected from the internet+ journals+ reference boo!s
etc.
Scope of the study
,ll the )uestions have been analysed by adding up the responses against each
alternative and answers from the various respondents. The collected data has
been subject to statistical analysis to draw inferences and suitable
conclusions. *tatistical tools li!e chi-s)uare and percentage are used. -or
calculating the table value for analysis with chi-s)uare+ %. significance level
is used.
RESEARCH METHODOLOG
The study is based on primary data+ which has been collected from the credit
card users with the help of a well drafted and structured )uestionnaire /see
anne$ure0. -or the collection of primary data+ we have confined ourselves to
,hmedabad+ 'ndia. 1ur sample consists of a total of 1%2 respondents. The
respondents are basically credit card users+ who have been selected by
following the non-probabilistic sampling+ simple purposive sampling and
convenience sampling techni)ues.
-urther+ it is essential to mention two things: firstly+ in convenience-sampling+
respondents /who were seen using3have possession of credit cards0 were
selected because they happened to be in the right place at the right time and
secondly+ convenience sampling techni)ue is not recommended for descriptive
or casual research+ but they can be used in e$ploratory research for the
generation of ideas /Malhotra+ 22%0. The )uestions in)uired the choice of
credit card+ and the users were given 4 statements. 'n addition+ the
respondents had to rate the credit cards according to the importance+ on the
5five-point 6i!ert scale.7
Sa!p"i#$ P"a#
Target (opulation: 8redit 8ard holders
*ample *ize: 122 respondents
*ampling techni)ue: 8onvenience sampling
%e#eficiaries
1. Banks
9an!s may come to !now about the usage pattern of the credit card holders
based on the demographics+ purposes and consumption pattern and may aim to
target new customers based on the derived facts.
2. Probable subscribers
:ew prospects may find it helpful in selecting the credit card company and
the ban! issuing the credit based on the satisfaction level of the e$isting
credit card holders.
3. Researchers
*tudy gives the researchers the insight about the credit card system prevailing
and the usage pattern and satisfaction level of the e$isting credit card holders.
Research Desi$#
The research design that has been used is ;escriptive Research.
? 'nvolves gathering data that describe events and then organizes+
tabulates+ depicts+ and describes the data.
? R of 14.4 percent per
annum during the same period.
'n -?21 the economic slowdown resulted in a >ross ;omestic (roduct />;(0
growth of only &.2 percent as against the previous year7s &.# percent. The H('
'nde$ /a measure of inflation0 increased by C.1 percent as against "." percent in
-?22. *imilarly+ money supply /M"0 grew by around 1&. percent as against
1#.& percent a year ago.
The growth in aggregate deposits of the scheduled commercial ban!s at 1%.#
percent in -?21 percent was lower than that of 1A." percent in the previous year+
while the growth in credit by *89s slowed down to 1%.& percent in -?21 against
" percent a year ago.
The industrial slowdown also affected the earnings of listed ban!s. The net
profits of 2 listed ban!s dropped by "#.#" percent in the )uarter ended March
221. :et profits grew by #2.C% percent in the first )uarter of 222-221+ but
dropped to #.%& percent in the fourth )uarter of 222-221.
1n the 8apital ,de)uacy Ratio /8,R0 front while most ban!s managed to fulfill
the norms+ it was a feat achieved with its own share of difficulties. The 8,R+
which at present is A.2 percent+ is li!ely to be hi!ed to 1.2 percent by the year
22# based on the 9asle 8ommittee recommendations. ,ny ban! that wishes to
grow its assets needs to also shore up its capital at the same time so that its
capital as a percentage of the ris!-weighted assets is maintained at the stipulated
rate. Hhile the '(1 route was a much-fancied one in the early IA2s+ the current
scenario doesn7t loo! too attractive for ban! majors.
8onse)uently+ ban!s have been forced to e$plore other avenues to shore up their
capital base. Hhile some are wooing foreign partners to add to the capital others
are employing the MJ , route. Many are also going in for right issues at prices
considerably lower than the mar!et prices to woo the investors.
'#terest Rate Sce#e
The two years+ post the East ,sian crises in 1AAC-A4 saw a climb in the global
interest rates. 't was only in the latter half of -?21 that the ross
*ettlement /RT>*0 *ystem+ a 8entralised -unds Management *ystem /8-M*0+ a
:egotiated ;ealing *ystem /:;*0 and the *tructured -inancial Messaging
*ystem /*-M*0. *imilarly+ integration of the various payment products with the
systems of individual ban!s has been another thrust area.
An Assessmen!
These reform measures have had a major impact on the overall efficiency and
stability of the ban!ing system in 'ndia. The dependence of the 'ndian ban!ing
system on volatile liabilities to finance its assets is )uite limited+ with the
funding volatility ratio at -2.1C per cent as compared with a global range of
-2.1C to 2.11 per cent. The overall capital ade)uacy ratio of ban!s at end-March
22% was 1.4 per cent as against the regulatory re)uirement of A per cent which
itself is higher than the 9asel norm of 4 per cent. The capital ade)uacy ratio was
broadly comparable with the global range. There has been a mar!ed
improvement in asset )uality with the percentage of gross
,s to grossadvances for the ban!ing system declining from 1#.# per cent in 1AA4 to %. per
cent in 22%. >lobally+ the
6 ratio varies widely from a low of 2." per cent to".2 per cent in developed economies+ to over 12.2 per cent in several 6atin
,merican economies. The reform measures have also resulted in an improvement
in the profitability of ban!s. Ro, rose from 2.# per cent in the year 1AA1-A to
2.A per cent in 22#-2%. 8onsidering that+ globally+ Ro, was in the range -1. to
&. per cent for 22#+ 'ndian ban!s are well placed. The ban!ing sector reforms
have also emphasised the need to review manpower resources and rationalise
re)uirements by drawing up a realistic plan so as to reduce operating cost and
improve profitability. The cost to income ratio of 2.% per cent for 'ndian ban!s
compares favourably with the global range of 2.#& per cent to 2.&4 per cent and
vis-a-vis 2.#4 per cent to 1.1& per cent for the world7s largest ban!s. 'n recent
years+ the 'ndian economy has been undergoing a phase of high growth coupled
with internal and e$ternal stability characterised by price stability+ fiscal
consolidation+ overall balance of payments alignment+ improvement in the
performance of financial institutions and stable financial mar!et conditions and
the service sector ta!ing an increasing share+ enhanced competitiveness+
increased emphasis on infrastructure+ improved mar!et microstructure+ an
enabling legislative environment and significant capital inflows. This has
provided the bac!drop for a more sustained development of financial mar!ets
and reform.
CHAPTER 3
':TR1;enerally+ a time limit of si$ty /&20 days may be given to the customers for preferring
their complaints grievances.
b. The card issuing ban! 3 :9-8 should constitute >rievance Redressal machinery within
the ban! 3 :9-8 and give wide publicity about it through electronic and print media.
The name and contact number of designated grievance redressal officer of the ban! 3
:9-8 should be mentioned on the credit card bills. The designated officer should ensure
that genuine grievances of credit card subscribers are redressed promptly without
involving delay.
c. The grievance redressal procedure of the ban! 3 :9-8 and the time frame fi$ed for
responding to the complaints should be placed on the ban! 3 :9-8Bs website. The name+
designation+ address and contact number of important e$ecutives as well as the
>rievance Redressal 1fficer of the ban! 3 :9-8 may be displayed on the website. There
should be a system of ac!nowledging customersB complaints for follow up+ such as
complaint number 3 doc!et number+ even if the complaints are received on phone.
d. 'f a complainant does not get satisfactory response from the ban! 3 :9-8 within a
ma$imum period of thirty /"20 days from the date of his lodging the complaint+ he will
have the option to approach the 1ffice of the concerned 9an!ing 1mbudsman for
redressal of his grievance3s. The ban! 3 :9-8 shall be liable to compensate the
complainant for the loss of his time+ e$penses+ financial loss as well as for the
harassment and mental anguish suffered by him for the fault of the ban! and where the
grievance has not been redressed in time.
'#ter#a" co#tro" a#d !o#itori#$ syste!s
Hith a view to ensuring that the )uality of customer service is ensured on an on-going
basis in ban!s 3 :9-8s+ the *tanding 8ommittee on 8ustomer *ervice in each ban! 3
:9-8 may review on a monthly basis the credit card operations including reports of
defaulters to the 8'9'6+ credit card related complaints and ta!e measures to improve the
services and ensure the orderly growth in the credit card operations. 9an!s 3 :9-8s
should put up detailed )uarterly analysis of credit card related complaints to their Top
Management. 8ard issuing ban!s should have in place a suitable monitoring mechanism
to randomly chec! the genuineness of merchant transactions.
Ri$ht to i!pose pe#a"ty
The Reserve 9an! of 'ndia reserves the right to impose any penalty on a ban! 3 :9-8
under the provisions of the 9an!ing Regulation ,ct+ 1A#A for violation of any of these
guidelines.
Ho+ credit cards +or&
,n e$ample of the front of a typical credit card:
1. 'ssuing ban! logo
. EML chip
". Pologram
#. 8ard number
%. 8ard brand logo
&. E$piry ;ate
C. 8ardholderBs name
,n e$ample of the reverse side of a typical credit card:
1. Magnetic *tripe
. *ignature *trip
". 8ard *ecurity 8ode
, user is issued credit after an account has been approved by the credit provider+ and is
given a credit card+ with which the user will be able to ma!e purchases from merchants
accepting that credit card up to a pre-established credit limit. 1ften a general ban! issues
the credit+ but sometimes a captive ban! created to issue a particular brand of credit card+
such as 8hase+ Hells -argo or 9an! of ,merica issues the credit.
Hhen a purchase is made+ the credit card user agrees to pay the card issuer. The
cardholder indicates their consent to pay+ by signing a receipt with a record of the card
details and indicating the amount to be paid or by entering a (ersonal identification
number /(':0. ,lso+ many merchants now accept verbal authorizations via telephone and
electronic authorization using the 'nternet+ !nown as a 8ard not present /8
0transaction.
Electronic verification systems allow merchants to verify that the card is valid and the
credit card customer has sufficient credit to cover the purchase in a few seconds+
allowing the verification to happen at time of purchase. The verification is performed
using a credit card payment terminal or (oint of *ale /(1*0 system with a
communications lin! to the merchantBs ac)uiring ban!. ;ata from the card is obtained
from a magnetic stripe or chip on the cardD the latter system is in the race periods vary+ but usually range from 2 to "2 days
depending on the type of credit card and the issuing ban!. *ome policies allow for
reinstatement after certain conditions are met. overnment will hold #A. sta!e and private players will hold the rest %1. - the
majority being held by '8'8' 9an! /#.%.0.
Gro+th of %a#&s
P;-8 9an! and ,$is 9an! continue to remain as leaders of the private sector ban!s.
9oth the ban!s have maintained the advances growth and :'M. *9'+ (unjab :ational
9an!+ 9an! of 'ndia and old 9usiness 8redit 8ard
• P;-8 9an! Lalue (lus 8redit 8ard
(C(C( Bank is issuin& 2> seara!e credi! cards in (ndia. These cards ca!er !o a #ide
clien! base includin& sor!s lo'ers and businessmen $or e*amle.
(C(C( Si&na!ure Credi! Card
-ollowing are some points on '8'8' *ignature 8redit 8ard:
• 8ardholders get % points for 'nternational *pends worth ':R 122.
• @oining fee is ':R %+222.
• 8ardholders receive air accident insurance cover worth ':R " crores.
• Renewal fee is ':R +%22.
• 8ardholders receive -ree Helcome gifts of ':R "%+222. (rizes could be Tag Peuer
watches+ Travel (oints or Travel Louchers.
• Regular interest rate and cash advance fees are .C%. per month.
• 8ardholders get points for spending ':R 122 with the card for dining purposes.
• 'ssuer is L'*,.
• 8ardholders receive # points for spending ':R 122 with the card for travel purposes.
• There are 2. fuel surcharge facilities at all outlets.
(C(C( Bank Pla!inum Credi! Card
-ollowing are some features of '8'8' 9an! (latinum 8redit 8ard:
• 8ardholders get access to airport lounges on a priority basis.
• Renewal fee is ':R +%22.
• 8ardholders receive air accident insurance covers worth ':R 1crore.
• Regular interest rate is 1.AA. per month.
• 8ash and credit limits are high.
• 8ash advance fee is ".1%. per month.
• 8ards are only offered via invitation.
• 'ssuer is L'*,.
• @oining fee is ':R %+222.
• There are 2. fuel surcharge facilities.
(C(C( Bank Pla!inum Premiere Credi! Card
• 8ardholders receive personalized concierge services.
• Regular interest rate is .A%. per month.
• 8ardholders receive air accident insurance covers worth ':R #2 la!hs.
• 8ash advance fee is ".1%. per month.
• 8ash and credit limits are high.
• 'ssuer is L'*,.
• @oining and renewal are free.
• There are 2. fuel surcharge facilities at all outlets.
-ollowing are other credit cards issued by '8'8' 9an! in 'ndia:
• '8'8' 9an! Titanium 8redit 8ard
• '8'8' 9(6 ,MH,? 8redit 8ard
• '8'8' 9an! *olid >old /Lisa0 8redit 8ard
• '8'8' 9an! 9ig 9azaar *ilver 8redit 8ard
• '8'8' 9an! *olid >old /Master8ard0 8redit 8ard
• '8'8' 9an! 9ig 9azaar >old 8redit 8ard
• '8'8' 9an! >old ,merican E$press V 8redit 8ard
• '8'8' 9an! Trinethra 8redit 8ard
• '8'8' 9an! Travel *mart 8redit 8ard
• '8'8' 9an! 1rchid ,n Ecotel 8redit 8ard
• '8'8' 9an! >olf 8redit 8ard
• '8'8' 9an! Mohun 9agan 8redit 8ard
• '8'8' Megamart 8redit 8ard
• '8'8' 9an! Ebony 8redit 8ard
• '8'8' R91R "&2 8redit 8ard
• '8'8' 9an! ,irtel *ilver 8redit 8ard
• '8'8' *arovar Potels 8redit 8ard
• '8'8' 9an! ,irtel >old 8redit 8ard
• '8'8' 9an! P(86 *ilver 8redit 8ard
• '8'8' 9an! Toyota 8redit 8ard
• '8'8' 9an! P(86 >old 8redit 8ard
• '8'8' 9an! Thomas 8oo! Titanium 8redit 8ard
• '8'8' (R< 6ife 8redit 8ard
• '8'8' 9an! ,scent ,merican E$press 8redit 8ard
• '8'8' 9(6 Mobile 8redit 8ard
• '8'8' 9an! (latinum 'dentity 8redit 8ard
(n (ndian credi! card marke! !here are 12 ma6or !yes o$ credi! cards bein&
ro'ided by banks and $inancial ins!i!u!ions. These cards ro'ide a #ide 'arie!y o$
$inancial bene$i!s !o holders.
-a6or (ndian Credi! Card Tyes
-ollowing are various types of credit cards available in 'ndia:
• (remium 8redit 8ards
• 8ash 9ac! 8redit 8ards
• >old 8redit 8ards
• ,irline 8redit 8ards
• *ilver 8redit 8ards
• 9usiness 8redit 8ards
• 9alance Transfer 8redit 8ards
• 8o-branded 8redit 8ards
• 6ow 'nterest 8redit 8ards
• 6ifetime -ree 8redit 8ards
• Rewards
There are some additional credit cards that are available in 'ndia as well. Rewards credit
cards available in 'ndia can be subdivided into si$ categories Q (oints+ Potels and
Travels+ Retail+ ,uto and -uel.
A number o$ banks are o$$erin& lo# in!eres! credi! cards in (ndia in order !o
hel !he cardholders mana&e !heir $inances in a be!!er #ay. These cards are
hi&hly a'ailed by (ndian consumers on accoun! o$ !heir lo# in!eres! ra!es.
(C(C( Bank Pla!inum Credi! Card
-ollowing are some salient features of '8'8' 9an! (latinum 8redit 8ard:
• 8ardholders receive priority access facilities to airport lounges.
• Regular interest rate is 1.AA. per month.
• 8ardholders receive air accident insurance coverage worth ':R 1 crore.
• 8ash advance fee is ".1%. per month.
• 8ardholders have higher cash limits and credit limits.
• 8ard issuer is L'*,.
• The card is offered via invitation only.
• 'ssuing ban! is '8'8' 9an!.
• @oining fee is ':R %+222.
• There are 2. fuel surcharge facilities.
• Renewal fee is ':R +%22.
American E*ress (ndian Airlines Credi! Card
,merican E$press 'ndian ,irlines 8redit 8ard has the following salient features:
• The cardholders receive 12. discounts on business class flights and 1%. discounts
on economy flights.
• Renewal fee is ':R "C%2.
• There is a %. discount on super saver fares.
• Regular interest rate is 1.A..
• 8ardholders receive business class upgrades for free.
• 8ash advance fee is 1.A..
• 8ardholders receive complimentary tic!ets.
• 8redit card issuer is ,MER.
• @oining fee is ':R "C%2.
• There are 2. fuel surcharge facilities that can only be availed at P(86 outlets.
HD.C Bank Ti!anium Credi! Card
-ollowing are the salient features of P;-8 9an! Titanium 8redit 8ard:
• 8ardholders receive e$clusive concierge services.
• Regular interest rate is .&%. per month.
• 8ardholders receive rebates at hotels and clubs.
• 8ash advance fee is .%. per month. The minimum cash advance fee is ':R "22.
• There are accelerated rewards programs that are provided on the basis of e$penditure
with the card.
• 'ssuer is Master8ard.
• 8ardholders receive 2. fuel surcharge and balance transfer facilities.
• 'ssuing ban! is P;-8 9an!.
• @oining fees and renewal fees are variable.
-ollowing are some other low interest credit cards that are available in 'ndia:
• P;-8 9an! Lisa *ignature 8redit 8ard
• 9198,R; E$clusive Homan credit card
• P;-8 9an! (latinum (lus 8redit 8ard
• 919,8R; E$clusive ?outh 8redit 8ard
• P;-8 9an! 8orporate 8redit 8ard
• 919,8,R; *ilver 8redit 8ard
• Pero Ponda *9' 8redit 8ard
• 919,8,R; E$clusive 8redit 8ard
• 9198,R; 8orporate >lobal 8redit 8ard
• ,$is 9an! *ecured 8redit 8ard
• :ERT>E: 9198,R; >old 8redit 8ard
• P*98 (latinum 8redit 8ard
• 919,8R; >old Lisa 8redit 8ard
• ?atra 9arclaycard (latinum 8redit 8ard
• 919,8R; >old Master8ard 8redit 8ard
• ,9: ,MR1 (latinum 8redit 8ard
CRED(T CARD .RA;DS
There is an international rac!et of cyber criminals. 8redit card information in 'ndia is
sold to cyber criminals in other countries. The information is misused for carrying out
major financial frauds. . ;ue to lac! of awareness+ people submit personal details and
credit card information to fraudulent emails. *ometimes+ fraudsters steal credit card
information. *ome fraudsters go through trash to find discarded receipts or carbon for
obtaining information and then use the account number illegally.
There were underground FcarderG forums where credit card numbers are bought and
sold. These forums bring together people who steal the numbers and those who use them.
,n individual researcher in cyber crime and cyber laws+ (atil said economic offences
using credit cards have increased in 'ndia and countries li!e