credit card data

Credit card banks data

Is Barclays Shutdown Credit card business

Standard Chartered Bank is set to acquire over half of Barclays credit card portfolio in India. Barclays currently has a little over 300,000 cards in India.
The deal, which will be signed this week, will see Standard Chartered Bank adding 170,000 cards to its existing portfolio of 1.1 million cards. The foreign lender will also become the fifth largest card issuer in the country after HDFC Bank, ICICI Bank, Citibank and State Bank of India.
It is believed Standard Chartered Bank will buy the portfolio at a hefty discount to the book value. The book value of the portfolio, which will be sold, is estimated at Rs 180-200 crore.
“The transaction involves the sale of one-third of the portfolio. These are good quality, vintage cards. The deal does not include transfer of people or premise,” said a source familiar with the development.
According to sources, Barclays can either sell its remaining portfolio to an asset reconstruction company or close the business.
Sources said Standard Chartered Bank “almost cherry-picked the cards and will buy only cards that mirror its existing portfolio”. The average holding of these cards is over four years.
Initially, when Barclays announced its plan to exit its cards business, five banks and financial institutions, including Axis Bank and SBI Card, had expressed interest in buying the portfolio.
Foreign and private banks in India have once again turned aggressive in expanding their unsecured assets, especially the credit card business.
Early this year, IndusInd Bank had acquired Deutsche Bank’s Rs 224 crore credit card business in India, while HDFC Bank had announced the launch of premium segment cards, including ‘Infinia’, which it positioned against the American Express card.
Credit card outstanding in the first seven months of the current financial year has increased 7.2 %, as compared to an 8.3 % decline during the year-ago period. According to the latest data released by the Reserve Bank of India, the growth on a year-on-year basis was five per cent till October 21, as compared to a 22 % decline in the previous year.

Credit card downward chart

Credit card downward chart

Credit Cards payments up by 22 percent

In mean time, peoples pay more money with their credit cards. Payment through credit cards up by 22 % in last financial year. But the active credit card goes down by 2.7%.
Debit cards transactions increased by 46.5 % because of the increase in ATMs chains.
Most of the banks issues ATM for their saving account holders for withdrawing easy cash from ATM. Now active debit card goes to 22.8 cr while the credit card was just 1.8 cr.
SBI stood at no.1 with largest depositor base in India, SBI issued 8 cr debit cards, No.2 is ICICI Bank with 1.65 cr, 3rd is HDFC 1.31 cr, In credit card bazaar, HDFC at No.1 with over .5 crore active credit cards followed by ICICI Bank, SBI, Citibank and standard chartered. Calculate your emi with EMI Calculator
RBI data shows, the value of transactions at domestic ATMs using debit cards to be Rs 9,48,346 crore across 398.40 crore transactions in the March 2010-February 2011 period, while domestic ATM-based credit card transactions were worth just Rs 934 crore across 0.19 crore transactions.

Ambassadors are also not safe from credit card frauds

AK pandey, Ambassador, lives in GK-1, Delhi, complained that someone misused his sbi credit card. Who recently purchase 10gm gold coin in amritsar. Person name who used his credit card his name is satinder singh, resident of Guru Nanak Colony, Amritsar.
When Delhi police reached Amritsar and traced the address but it was found to be fake. The phone number given by indict at the time of the online booking was switched off. Police got new phone number from the online company and a trap was laid near the post office in Amritsar with the help of local police. After a long wait, he came to collect the package. While receiving the package, he was caught red-handed," said addl CP (Southeast) Ajay Chaudhry.
His real name is Avtar Singh. The gold coin was found in the packet. He further told the cops that he had used the same method earlier to buy valuable items online. The police team recovered four gold coins of 2 grams each and one Dell desktop computer from his house. Singh has been sent to judicial custody.

Banks, Nabard, insurance companies - District Inclusion Plans

Credit cards are set to become an integral part of a new countrywide financial inclusion drive that will pitch gram panchayats as the basic planning unit for delivery of financial services.
The finance ministry has drawn up a comprehensive plan that requires banks to provide a kisan credit card to every farmer and a general purpose card to other households.
The plan, sent earlier this week to the heads of all public and private banks and regional rural banks, envisages a bottom-up financial inclusion drive starting at the district level.
The directive makes it clear that every household must have a bank account, credit card (kisan credit card for farmers and general credit card for others), micro-insurance and micro-pension scheme.
The country has nearly 140 million rural households, most of which do not have credit cards. If all these households were to be issued a card, it will substantially add to the credit card numbers, currently pegged at 17 million.
"It is a dangerous idea as credit cards are unsecured loans and are at times used for usurious consumption," said a senior banker, requesting anonymity.
Most banks are in the process of tightening their credit card operations, which have resulted in the total number of cards declining sharply from the peak of 28 million in 2007-08.
The emphasis of the financial inclusion drive will now change from the village to gram panchayat level, as that has become the basic planning unit for the various government schemes.
"As gram panchayats are at the centre of various developmental and welfare schemes and will play an important role in the electronic benefit transfer, service area of the banks needs to be defined in terms of the gram panchayats," the directive says.
Each gram panchayat will have a designated bank that will be responsible for the coordination and delivery of the various financial services in that area.
District-level officials of banks, insurance companies and Nabard will prepare a comprehensive financial inclusion plan for each district.
All underbanked districts will have, at least, one branch for areas with population exceeding 5,000 by September 2012. These branches will have only two officials and an ATM to begin with.
At least one branch should be available at a radial distance of 5 km in the underbanked districts.
In habitations without branches, banking correspondents will have to provide financial services with each correspondent dealing with 1,000-1,500 households for them to be viable.
The plan also mandates that government benefits must be transferred electronically into the accounts of the beneficiaries in the areas covered under the financial inclusion drive.
The lead banks have to work out a road map for Electronic Benefit Transfer in respect of each of the 32 government schemes, including the flagship Mahatma Gandhi National Rural Employment Guarantee Act, which involve some sort of financial transfer.
The Reserve Bank of India has already issued guidelines on Electronic Benefit Transfer and its convergence with the financial inclusion plan.
(Source - Economic Times)

Citigroup 74% jump in Q3 profits

Citigroup Inc on Monday reported its seventh straight quarterly profit, with a 74 % jump in Q3 earnings to $ 3.77 billion, as the financial services giant recorded lower losses from bad loans.
The entity had a net income of $ 2.17 billion in the July-September period of 2010, the US-based Citigroup said in a statement.
Citigroup's robust earnings lifted as the bank recorded lower losses from loans and made accounting gains related to its credit holdings.
Third quarter revenues of $ 20.8 billion were up slightly from $ 20.73 billion registered in the year-ago period.
Citigroup posted its seventh profitable quarter in a row after losing a total of $ 29.3 billion for 2008 and 2009 during the global financial crisis.
"Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results. We continue to manage our risk prudently while growing the businesses that are core to our strategy.
"We have reduced the size of Citi Holdings to 15 % of our balance sheet and further improved our financial strength. We are very well positioned as we help our clients navigate the world's current trends and key opportunities," Citi CEO Vikram Pandit said.
The bank's losses from bad loans fell by 41 % during the quarter to $ 4.5 billion as defaults fell from its credit card loans for Citibank credit cards.
As far as its India operation were concerned, the non-performing asset of the bank stood close to one % of the total loans at the end of September quarter.
NCL (net credit loss) of the Indian operation stood at 0.9 % in the July-September quarter against 0.8 % in the previous quarter.
Citicorp, the company's retail banking and commercial and investment-banking business, saw its net income jump by 32 %, from the prior year period to $ 4.6 billion, while revenues shot up by 9 % to $ 17.7 billion. In Asia, Citicorp's net income grew by 42 % to $ 1.41 billion and net revenues surged by 21 % to $ 4.28 billion.
Citi Holdings's net loss stood at $ 802 million compared to $ 1.14 billion in the year-ago period. The unit's revenues decreased 27 % from the prior year period to $ 2.8 billion as assets declined.
The bank said its regional consumer banking operations have witnessed a growth of 2 % to $ 8.26 billion and net income accelerated by 31 % to $ 1.61 billion.
Its international regional consumer banking revenue grew across all regions versus the prior year period, with Asia revenues growing 13 %, Latin America 9 % and Europe, the Middle East and Africa by 5 %.

Debit card swipes hit credit card usage

July 2011 marks a tipping point in the payments space. For the first time, debit cards have been used in more transactions than credit cards. While credit cards are still more significant in value terms, the gap between the two has shrunk.
As compared to 2.56 crore credit card transactions in July 2011, debit cards were used 2.66 crore times. This has continued in August when credit cards were used 2.76 crore times, while debit was used on 2.77 crore occasions. In the past, credit card swipes always outstripped that of debit. In the whole of 2010-11, credit cards were used for 26.51 crore payments, while debit cards were used 23.7 crore times.
In value terms credit card payments accounted for Rs 37,678 crore worth of payments up to August 2011, while for debit cards it was Rs 20,483 crore. Total value of debit card transaction is lower than that of credit cards is because on an average an individual spends Rs 2,989 every time the card is used as compared to Rs 1,632 which is the average for a debit card payment. Click to know more and apply for SME Loan
Bankers say that it is only a matter of time before debit cards completely dominate the payment space. The reason for this is the sheer numbers. Debit cards have been growing by leaps and bounds. From 4.97 crore cards in 2005-06, their number has risen to 25.14 crore as on August 2011, according to data released by the Reserve Bank of India in its latest monthly bulletin. Credit cards, on the other hand, have been shrinking since the global crisis. From a peak of 2.8 crore in 2008, the number shrunk to 1.8 crore in March 2011. This has come down further to 1.75 crore in October 2011.
The decline has been largely because of the foreign banks and banks like ICICI which have been shrinking their portfolio. According to industry sources, ICICI Bank's card portfolio has continued to shrink during the current year as well. While other lenders such as HDFC Bank and Axis Bank have started issuing cards at a much higher pace, the issuances are not enough to bring up the overall industry numbers.
While debit cards have seen growth in issuances, cardholders have not been using them for transactions. In 2010-11, the average transaction per card has been 14. As compared to this, the average debit card has been used only once in a year. While the number of debit cards has gone up more than five times in five years the average number of transactions has not.
Even five years back the debit card usage was on an average just once in a year.
Credit cards, on the other hand, are seeing an increase in usage. At the time of the global financial crisis, the average usage of cards had dipped to eight times in a year. At the end of March 2011, this had improved to 14. Bankers say that this is because issuers have become choosy on issuing cards. Second, multiple card holdings have come down as even cardholders are realizing that it makes more sense to consolidate purchases in one card in terms of rewards.

Banks defer foreign fund-raising plans

Volatile markets and poor investor confidence have made Indian banks defer raising funds from foreign markets through medium-term notes (MTN) and instead find alternative routes.
Chennai-based Indian Bank, which had plans to raise $1 billion in two tranches during the current financial year though MTNs, has deferred its plans and will wait till the market condition improves. The state-run bank has opted for the line of credit option to meet its funding requirement.
“If we go for raising funds through the MTN route, we will have to find assets immediately else, the cost of keeping the money idle will be very high. So, we have opted for the line of credit route,”
T M Bhasin, chairman and managing director of Indian Bank, told Business Standard.There has been a moderation in growth owing to monetary tightening by the Reserve Bank of India (RBI). Apply for Credit Cards Online
The markets worldwide have been jittery recently due to the euro zone crisis and the US downgrade. According to a recent report by ratings agency Crisil, the Indian corporate sector fears a credit freeze in advanced nations, which could impair their ability to raise debt and roll it over. “We can get credit up to $500 million through foreign banks as and when we require it. This is far more cost-effective in an environment where we need to protect our net interest margins. Hence, instead of the MTN route, we have opted for the line of credit route,” Bhasin added.
The cost of funds for the banks has been rising due to RBI's monetary tightening. The interest rates are nearly 300 basis points higher than the foreign markets which have made the banks to hunt for foreign funds.
Another state-run lender, Union Bank of India, has shelved its plans of raising $300-500 million by September through MTNs for the time being, due to unattractive high yields being demanded by the investors. “The credit spreads have widened significantly. Indian banks generally leverage the spreads between the borrowing and lending cost. In view of this, it is not attractive in the present scenario to raise funds for onward lending,” said V K Khanna, general manager (treasury) at Union Bank. The bank would consider raising funds as and when the markets and pricing become attractive, Khanna added.
Lenders prefer taking loan in tranches for meeting their short-term funding requirements. Banks are not keen on giving credit guarantee now.
IDBI Bank is another lender that was looking at raising funds overseas through MTNs but has put its plan on the back burner for the same reasons as above. “Yield is not very attractive for us at the moment. The rate at which we want to borrow must meet the lenders' expectations. So, till the market conditions improve we will not be looking at raising funds overseas,” Chief Financial Officer P Sitaram said.

How to protect yourself from credit card fraud

There is some good news in your inbox. Your wait for a tax refund is finally over. At least that is what the mail says: "The Reserve Bank of India will take full responsibility of your tax refund to your bank account. Please select your bank and complete the refund request carefully." All you have to do is to open the link, key in your name, credit card number and code number at the back of the card and you will get the refund immediately, it says.
Wait a minute... Tax refund from the RBI? Credit card details for a refund? If these questions didn't crop up in your mind, you may have fallen victim to Net fraud. The RBI or the Income Tax Department never ask for your PIN, passwords or credit card details. So, the next time you see such a mail, press the delete button.
Apart from such fake mails from the RBI and IT Department, Netizens regularly receive mails that tell them about jackpot prizes they have won and ask for bank or credit card details to transfer millions. There are also mails from people stranded abroad while on a holiday and in urgent need of money. "In the faceless, new era of banking, a customer's identification is done through his user ID and password. This has brought new vulnerabilities as anybody who possesses these can transact on his behalf," says RVS Sridhar, president, IT & RBO, Axis Bank.
Frauds in India
The most common Net attacks are phishing (fraudulent e-mails) and vishing (fake voice messages and phone calls), data leaks while a card is inserted or swiped on a machine and copying of the personal identification number (PIN). "In India, data loss through cyber attacks decreased sharply in 2010, but the total number of breaches was higher than ever. Fraudsters are not attacking a single individual and getting data, but are spreading the attacks. They are using the same attack message and getting multiple data without a lot of effort," says Jelle Niemantsverdrie, principal consultant, forensics and investigative response, EMEA Verizon Business Security Solutions. Click to Apply for Credit Cards Online
Stealing information through counterfiet cards is also rampant. The data on the magnetic strip is electronically copied on to another card and used without the cardholder's knowledge. The modus operandi is very sophisticated. "A magnetic card reader is installed over the card slot, while a surveillance camera observes the user's PIN," says Rakesh Aulaya, PR manager, South Asia Pacific, NCR, an ATM manufacturer. Though this is common while travelling overseas, it can also happen at domestic ATMs.
ATMs are more vulnerable because banks and other intermediaries have been mandated to increase security in other channels, such as online banking and plastic money usage. Says Uttam Nayak, country manager, Visa: "ATMs have poor security at the location and some controls on other platforms are missing."

Federal Bank look at venture into credit card

In a bid to extend its retail clientele, private sector lender Federal Bank is planning a foray into credit cards. Initially, the bank plans to outsource the back-end mechanism and would only market the product under its brand name.
“We have sensed a need to launch a credit card,” Abraham Chacko, the executive director of the bank, told Moneycontrol.com.
“It is at the preliminary stage, and we are internally discussing the proposal. We are connecting some external parties to gain knowledge about outsourcing the product in terms of pricing, customers and other business details,” Chacko said.
There are some banks and financial institutions, which develop back-end mechanism of credit cards for other institutions on a cost sharing basis. Some of those include Bank of India , State Bank of India , SBI Genpact, ICICI Bank , Standard Chartered Bank and others.
Federal Bank has an existing debit card base of around 16 lakh. Its retail business (with special focus on non-resident Indian customers) forms around 55% of total business. Retail products currently include gold, home and car loan.
If the credit card business is able to achieve a certain scale, Federal Bank will stop outsourcing it and will operate it on its own. The executive director, who had spent over 20 years in foreign banks before joining Federal, however, did not mention any tentative launch time.
“We will also open 1,000 branches in CY2012. Half of those branches will be out of the state of Kerela. We will equally drive efforts to boost our fee income through those branches,” he added. Currently, majority of its branches are confined within the geographical boundaries of the southern most state.
Meanwhile, the bank is expected to open a branch in Dubai soon. The Reserve Bank of India is yet to give a final approval for that. The lender also aims to open two representative offices in Singapore and US or UK to expand its NRI customers’ base. In June quarter, its loan book stood at around Rs 32,000 crore, up 18% year-on-year.
Last six months, two top officials with vast banking experience from foreign banks have joined Federal Bank. They are Shyam Srinivasan as MD and Chacko himself. This led to some market optimism about the south-based bank, which was widely considered as a low-profile community driven lender.
At 12:45 hours, Federal Bank shares were trading at Rs 357.50, down 1.20%.

Find best Deals on Car loans how

They are standard reducing balance schemes and cheaper, because the manufacturer is subsidising the loans by giving extra but indirect discount in terms of lower interest rate, experts say. "Typically, car manufacturers collaborate with financiers to come up with a custom offer on one or all the cars they have in the portfolio. Both the car manufacturer and finance company go the extra mile to make the deal sweet.
This way, these deals are normally cheaper than the generic auto loan schemes offered by the banks. The availability and sweetness of these schemes depend on how badly a car manufacturer is looking to do sales. With a slow market like today, there are plenty of such deals even on fastmoving cars," says Banwari Lal Sharma AVP - Marketing, Car-Wale Automotive Exchange Private Limited.
However, don't go by the rates alone. The numbers could be highly deceptive when it comes to the car loan market. Car loan interest rates, unlike those on home loans, are not easy to compare. This is because banks just quote the rack rates, whereas the effective interest rate is much lower and it varies from dealer to dealer. That is why if you really want to evaluate a car loan offer that would work lighter on your pocket, you have to do the math yourself.
"The bank specifies the rack rate on which it would propose to lend. The dealer has the option of ploughing back his commission, thereby reducing the interest burden for the customer. The decision on the extent of commission to be ploughed back rests with the dealer. Manufacturers also provide subventions, from time to time, to ensure stock liquidation, and these may also be passed on to the customer to reduce his effective interest burden. However, the bank would continue to maintain its lending rate," says Ashok Khanna, senior executive vice-president & business head, vehicle loans, HDFC Bank.
Hence, it all boils down to the dealer-bank tie-up and how much benefit the car dealer passes on to the customer. Here, we help you navigate the process of identifying the best car loan deal.
EVALUATING THE OFFERS
With the hardening of interest rates and fuel prices touching the sky, discounts and subventions by manufacturers are the only way to make the car market survive the tough time. Most loan deals are genuine in nature, still buyers have to be careful. They need to understand the scheme very well and compare it with the other schemes from different finance companies.
"There have been instances of a non-standard loan product at 7% interest rate working out to be more expensive than a 12% interest rate standard loan because the non-standard product had a different compounding base and wasn't on a monthly reducing basis," says Sharma says.
A subsidy or discount offered by a manufacturer can be factor in while calculating the loan burden to make the deal look much better. For example, a Rs 3-lakh loan at an interest rate of 13% for five years will have an EMI of Rs 6,753. "Let's assume that the dealer gets a discount of Rs 20,000 to be offered to the customer.
He doesn't tell it to the customer but reduces it from the loan amount, making the EMI go down as low as Rs 6,303. Or he may also choose to tell the customer that the effective interest rate he is offering is 9.5%. A discount of 20,000 doesn't sound as lucrative as an interest rate of 9.5% in the current scenario," says Sharma.

SCOUTING FOR THE BEST RATE
Before scouting for the best rate, finalise the car model and the loan amount. If you plan to fix the model based on the ongoing loan offers, it will only add to the confusion. Once you finalise the car model and the loan amount, then calculate the EMI with the help of the EMI calculator available websites and portals of many banks.

RBI asks banks to implement safety measures for card usage

In order to minimise fraud cases and ensure security of transactions, the Reserve Bank of India (RBI) on Thursday asked banks to implement various safety measures related to credit card and debit card usage over a period of next two years.
The central bank directed banks to strengthen the existing payment infrastructure and future proofing system along with adoption of fraud risk management practices within a period of next 12-24 months, RBI said in a notification.
"The increased usage of credit/debit cards at various delivery channels also witnessed the increase of frauds taking place due to the cards being lost/stolen, data being compromised and cards skimmed/counterfeited. There is, therefore, an imperative need to secure such card based transactions...," it said.
It also emphasised on the need to migrate to Euro pay MasterCard Visa (EMV) chip and PIN based cards from the present magnetic strip cards as the later is vulnerable to skimming and cloning.
"The need for a complete migration to EMV chip and PIN based cards could be considered based on the progress of 'Aadhar' (Unique Identification Card) in about 18 months," it noted.
As per the circular, the central bank has directed banks to implement improved fraud risk management practices by September 30, 2012. The banks have also been directed to strengthen merchant sourcing and monitoring process by September 30, 2012.
The central bank also given a timeframe till September 30, 2013, to banks for securing the technology infrastructure.
To strengthen infrastructure for accepting these cards, RBI has said that commercial readiness of acquiring infrastructure to support PIN at POS (points of sale) should be ready by June 30, 2013.
Similarly, the enablement of all POS terminals to accept debit card transactions with PIN should be completed by June 30, 2013.
The apex bank also directed banks to be ready from technical perspective to issue EVM cards by June 30, 2013.

Mastercard, Visa Best Positioned To Profit Among Credit Card Companies

American Express.
A quick look at the fundamentals shows this company currently trades at 12.05x forward earnings, price to book value of 3.29 and projected EPS growth next year of about 5%. Also important to mention is the high debt to equity ratio of 3.58. This is a scarily high number and looking at the total debt over 5 years, there has been little to show that management is concerned with paying down this debt. Rates may be low for some time but even at low rates of interest the company is still throwing money out the window in interest payments.
Next Discover Card Financial Services (DFS).
Fundamentals for discover card are slightly more promising that AXP's with a forward P/E ratio of 8.79 and debt to equity ratio of 2.4. DFS trades slightly below twice book value at 1.92. The company also has cash on hand, about 6.91 per share. This should help the company lower its debt and secure the financial stability of the company.
MasterCard.
The #2 company in regards to market share, the company exhibits some extreme fundamental data. MA trades currently about 2 times the P/E ratios of the previous two companies. Its earnings multiple is 16.65 yet this is justified by the company's 18% growth in EPS expected next year and over the next five years. The company has no debt which enhances the company's financial stability and has an outstanding $28 per share of cash on hand. This cash on hand is equivalent to 8% of the stock price. This leads me to believe the company may be planning a significant share buyback and/or may increase its current dividend or announce a special dividend. On the negative side, the company trades 8 times book value which is a very large over-pricing, which may cause some selling pressure moving forward.
Visa .
Visa is the #1 company in regards to market share and currently trades at 15.91 times forward earnings and also has no debt to payoff. Visa also has its high P/E ratio justified by a growth rate next year of 15% and a 5 year growth rate of 18%. Visa has about 4.68 per share of cash on hand which it may use to continue its ongoing share buyback plans.
Intangibles
AXP is one of the few cards that still charges its users to have the card and the rates are not cheap. Of recent, the company has focused on promoting its brand by waiving the annual fee which should help spur growth, but the key to the company's success will be whether or not it can hold on to those customers to generate the fee revenue.
DFS is more than a credit card company, it is a financial services company. Over 70% of all credit card users have stated that they use the company's website to pay bills or monitor their statements. Through this usage, Discover is able to promote its financial services business such as online banking and CDs. This area may offer DFS a growth opportunity that isn't available through the other card companies.
What went into my decision:
1. Visa has the largest circulation of credit and debit cards by almost double its next competitor, MasterCard. It has global growth potential that is already being implemented and it's in the process of reaching untapped markets and catering to unique curcumstances around the world, such as in India, where debit cards, not credit cards, are the primary medium for payment.
2. MasterCard has the ability (and has already begun) to expand overseas but will really need to break through in a big way since Visa already has a 2:1 advantage in cards issued. Apply for Credit cards with best deals and offers
3. Discover Card has great growth potential horizontally with its online banking division, however, vertically I see growth in the credit card industry to be tough at best.
4. American Express won't have much of a future if it doesn't pay down the debt and alter its business model. With the changing economic times, so must American Express change its business model to phase out annual fee cards. When it comes time for businesses, especially small businesses, to cut costs and find savings wherever they can, finding an alternative to American Express will be a no brainer.

HSBC aims to grow unsecured retail biz in India

HSBC is looking to grow its unsecured Indian loan portfolio, mainly credit cards, its country chief executive said, as its retail operation moves towards a return to profitability in Asia's third-largest economy.
Banks in India slashed unsecured lending after personal loans and credit card dues turned bad following the global financial crisis. HSBC India saw a 46 percent drop in overall profit for the first half of 2009 as losses on retail lending more than doubled.
"At this stage, we are well positioned to grow our unsecured book, but we will do it in a cautious and calibrated way," Stuart Davis, who took over as India chief executive in April 2009, told Reuters in an interview on Tuesday.
"We won't be looking at open market sourcing as we did perhaps four or five years ago," he said, referring to the practice of issuing cards to customers who do not already have an account with the bank.
HSBC's expansion of unsecured lending in India comes as it is turning around the performance of its retail banking operations in the country, the sixth biggest contributor to the UK-based bank's group profit.
In the first half of 2011, HSBC, Europe's biggest bank, posted a loss of $4 million in its India retail banking and wealth management business, narrowing from a loss of $49 million a year ago.
Fewer than 18 million of India's 1.2 billion people use credit cards. In China, a country with a slightly higher population, more than 200 million credit cards were in use as of a year ago.
Foreign banks lack the branch networks of local lenders like ICICI Bank and HDFC Bank, India's biggest card issuers, but tend to attract the most well-heeled customers in a country where incomes are rising fast.
London-based Standard Chartered, one of the biggest foreign banks in India, expects growth of 30-35 percent in new customers this year, Shyamal Saxena, head of retail banking products, had said in July.
HSBC's overall first half pre-tax profit in India rose 32.6 percent to $451 million. The bank is on track to achieve its target of $1 billion in India overall profit in 2013, Davis said.
LOAN GROWTH
HSBC, one of the top three foreign commercial banks in India along with Citigroup and Standard Chartered, expects to grow its India loan book "at least in line" with the sector's growth in this fiscal year, Davis said.
The country's central bank expects credit growth at 18 percent in this fiscal year, down from an earlier projection of 19 percent. HSBC posted a 17 percent rise in demand for loans in the last fiscal year to end-March 2011.
India raised interest rates last week for the 12th time in 18 months, triggering worries about a slowdown in demand for corporate and retail loans from banks.
"There is certainly a slowdown in loan demand...(but) we are not looking at a situation that we are looking at in Europe and the U.S. where loan growth is negligible," he said, adding the bank also plans to grow its India mortgage loan book.
The bank's home loan book in India grew 11 percent in the first half of this calendar year to $949 million.
"We feel very positive about the growth scenario and our business here and in the absence of some unforeseen macroeconomic downturn here in India we are positive about our growth," Davis said.
The bank, which plans to shed 30,000 jobs globally in the next three years to cut costs, expects to raise its India banking operations headcount over the next few years from about 7,500 now on the back of growth in its business, Davis said.

IDBI to float arm for core fund

Public lender IDBI Bank Ltd will set up a non-banking subsidiary to float an infrastructure debt fund.
“We are waiting for the Reserve Bank of India to come up with the guidelines for setting up non-banking finance companies (NBFC) that are eligible for floating infrastructure debt funds. The banking regulator is expected to announce its guidelines for setting up such NBFCs within the next six months,” IDBI Bank executive director R.K. Bansal told reporters today.
With Rs 33,000-crore credit outstanding in infrastructure projects, IDBI Bank has been planning to launch an infrastructure debt fund (IDF) to generate more long-term resources for power, port and road projects. Under the current regulations of the RBI, a commercial bank can lend a maximum of 25 per cent of its loan book to the core sector.
The Planning Commission has estimated the funding requirement of the infrastructure sector at $1 trillion with banks being the largest lenders. Insurance companies are not allowed to invest in infrastructure firms having a credit rating below AAA.
In June, the government issued a guideline, based on the recommendations of the Deepak Parekh committee, allowing banks to float infrastructure debt funds either through trust-based asset management companies (basically mutual funds) or through non-banking finance companies.
A trust-based fund will be regulated by the Securities and Exchange Board of India, while a fund set up as an NBFC will be under the Reserve Bank of India. Apply for Best Home Loans in Kolkata
Debit-credit card
IDBI Bank has launched a debit-cum-credit card, Magic Card, for its salary savings account holders.
“The card will work as a debit card till the account holder has balance in it but once exhausted, any further withdrawal or expenditure, the magic card will act similar to a credit card,” IDBI Bank chairman and managing director R.M. Malla said.

Improve your credit score

A CREDIT SCORE is a measure of how diligently you make payments relevant to loans, credit cards, telephone bills, insurance premiums, rent cheques and so on.
Credit Information Bureau (India) Limited (CIBIL) , which collects your credit information from banks will soon be keeping your credit scores on the basis of your bill payments too. CIBIL scores will range between 300 and 900, and a number of the above aspects will go into making that score. However, the most significant of these are repayment of loans and credit cards ¡V these factors will determine your loan eligibility and whether a loan can be granted to you in the first place or not.
Considering the important role your credit report plays in your financial life especially with relevance to loan borrowing and establishing credit worth, it¡¦s time you put some thought into how best you can make your credit report work to your advantage.
Here are list of things you keep your credit score up and above any kind of default:
1. Ensure you get your own copy of the credit report, at least on an annual basis
- Subject your credit report to a thorough scrutiny.
ƒ{- If you have nagging questions about any data, follow it up with CIBIL or the credit agency who has collated the data on the credit report.
ƒ{- Any discrepancies or pending defaults that has already been cleared must be immediately corrected or updated to ensure your credit score is not affected.
2. How do you correct discrepancies?
- Take up the issue with the bank in question first. For instance, if a debt has already been paid off and but the report doesn¡¦t show so. Call the bank and ask them to update with immediate effect.
ƒ{- The bank will then update the credit agency regarding the status and all is well. This approach is less time consuming and far better than directly contacting the credit agency. Punjabi Movie Jihne mera dil lutiya
What if the bank does not oblige to make the changes¡K
- Take up the matter with the credit agency and the banking ombudsman. However, first, wait for a period of 1 month for your bank to take corrective action.
- Act quickly and follow up with the concerned credit agency and the bank. Keep a record of when you have filed a complaint or sought clarification.
3. Put a priority check for your bill payments
Whether they are loans, credit card payments or insurance premiums -- every payment counts. If you need to be reminded about your payment, set up an automated system with your bank to get it cleared within the due date. It is a sure shot way to improve your credit score.
4. Try using your credit cards the smart way
Use your credit card! It serves as an excellent tool to boost a good credit score if utilised properly. However, the trick is to avoid making late payments. Things like not stretching it too close to your credit limit, regular use of the card but timely payments upfront is proof of how you manage credit lent in the short-term.
5. Net worth is key
Your credit report is based on the flow of credit and debt. Here, the ratio between these two factors is directly related to your credit score average. For instance, if you have several outstanding debts, and even if you pay them on time it would still affect your credit score.
Hence try and pay off as much debt as possible and keep them to a minimum before taking a fresh debt or loan.

LIC Housing net in june quarter up 21%

With an improved yield on loans, LIC Housing Finance on Wednesday posted a 21 per cent growth in net profit at Rs 256 crore for the first quarter ended June 30, as against Rs 212 crore a year before.
Total income for the reporting quarter ended June rose 40 per cent to Rs 1,418 crore, as against Rs 1,015 crore in April-June 2010, said chief executive officer V K Sharma.
However, its margins were under pressure. The Net Interest Margins (NIM) for Q1 dipped to 2.78 % from 3.01 % a year before. With improvement in the availability of resources and reasonable rates on market borrowings, it expects to maintain NIM at 2.7-3.0 per cent in 2011-12, Sharma said.
The company recorded growth of 15 per cent in individual loan disbursements in April-June. Individual loan disbursements stood at Rs 3,468 crore in Q1, as against Rs 3,018 crore in the same period of 2009-10. Total disbursements, including loans, to developers stood at Rs 3,545 crore for Q1, up from Rs 3,392 crore in the corresponding quarter.
The mortgage portfolio as on June 30 was up 32 % to Rs 52,876 crore, as against Rs 40,030 crore as on June 30. Gross Non Performing Assets (NPAs) were 0.84 % as against 0.92 % a year earlier.
Its share price closed 2.8 % lower on the Bombay Stock Exchange on Wednesday, at Rs 217.75.

Plan for extra costs before buying a flat

Why does the payment schedule of your house read different from the figure you had in mind? Most probably because you have done your mental calculation by just multiplying the total area with the cost per square foot. However, the total cost of your flat is not just a function of the total square feet area of the house and the cost per square foot. There are certain fixed costs such as stamp duty, registration , property tax, service tax, etc, that also need to be factored in. Also, there are other costs that vary from developer to developer.
The exact cost and the area
To begin with, you should know the exact area of your house, which is used to calculate the cost of the house minus the taxes and other fixed costs. Today, most projects are sold on the basis of the super built-up area (SBUA). "The SBUA is usually 40% to 60% more than the carpet area. Which means that if you buy 1,200 sqft of space from the builder , it can be safely assumed that your net carpet area will be around 700-750 sqft," says Akshay Kulkarni, executive director - India , residential services, Cushman & Wakefield .
Keeping account of every cost
The most common costs that are not taken into account are stamp duty and registration charges, floor rise, and the maintenance cost per square foot. "While some of the additional charges such as stamp duty and maintenance are known to most buyers, the less obvious ones - which often adds up to a considerable sum - are only communicated verbally. In other words, the buyer may not have a document to go back to establish when such add-on costs were mentioned. Therefore, the overall cost of buying a property can rise drastically above the originally quoted rate," says Mrunal Duggar , vicepresident - Homebay Residential , Jones Lang LaSalle . In India, the cost break-up given by a builder usually does not include the stamp duty charges. In a way it is a hidden cost for most flat buyers, since they do not factor in this cost while working out their budgets. Also, since most homes in India are bought through home loans, flat buyers should also take into account the cost of an insurance policy to cover the home loan. Besides, a strata search of the property's legal antecedents may add up to quite an amount. "The registration of a new property with the local electricity board for the fitting of an electric meter involves a one-time expense . If a home is not fully furnished and outfitted, the buyer will incur the cost of furnishing, fittings and all other expenses involved in customising the property to individual needs and tastes," says Duggar. "In the case of a resale standalone property, valuation of the property may be a prerequisite. This will be charges involved in using the services of a registered valuation agency. There may also be costs incurred on the transfer of the title of the property , which is also known as conveyancing ," he says. "Society maintenance charges and a yearly property tax are among the other costs that most buyers do not factor in prior to purchasing a property." For most under-construction projects, buyers agree on a price and the agreements are drawn up and registered, post which the bank starts to pay the cost. In most under-construction buildings , there is very little scope for any major negotiation on the costs to be borne by the buyer. Some of the components that should be checked are - floor rise, car park, PLC (preferential location cost), maintenance cost and fit-out cost, if any. "Even while buying a resale property, all the above costs will be involved. Besides, societies may ask for transfer premium, also known as voluntary contribution, which is rather involuntary. It can range from 2% to as high as 5% of the registered sale value. The actual cost as per the Societies Act is Rs 25,000. Any amount over this is shown as voluntary contribution ," says Kulkarni.
The common area
Right from your fancy lobby to your elevator to the kid's pool, every square foot gets added to your bill under the common area head. There are several such parameters that come with a rupee value and get added to your final home price tag. What makes this component of the cost tricky is that there is no standard definition for common area. Usually, common areas would comprise the floor service areas of your apartment, stair cases, lift areas, floor electrical distribution rooms, lobby, swimming pool, etc. The logic a developer gives is that a home owner uses these facilities as much as his/her own house. Hence, check with your builder on the gross floor area, the difference between the super built-up area and the carpet area, and details about all that is included under common areas. Know more and Free Download Songs of Jihne Mera Dil Luteya Movie
No free lunch
Builders provide facilities/ amenities like pools, gyms, health clubs, recreation areas, and yoga rooms. Some even provide spas, mini theatres, etc. However, none of these is free of cost. These facilities are included in the super built-up area, in addition to all the common areas over the carpet. In some cases, where clubs, etc, are being formed, there is a separate membership fee that is to be included in the price of the apartment . In some projects, however, the fee may be voluntary. In townships with facilities for healthcare and education, the premium over the basic rates will be higher.
Society maintenance charges
Most builders take the society maintenance charges for up to two years in advance. "This trend is due to the fact that it is easy to create the facilities but difficult to maintain as time goes by. Some people end up not paying as they don't see value in the facility provided. Hence, the best way is to take the maintenance cost upfront," says Kulkarni of Cushman & Wakefield. As far as your developer is transparent about the pricing and terms and conditions, there is no reason to worry. But now you know all the the relatively unknown cost heads that can increase the cost of your house.

Prevent fake transaction dual factor confirmation

Every time your bank asks for an additional password to authenticate your credit card transaction, you may feel a little irritated, since it takes effort to remember and type the extra words to complete the transaction.
But this extra layer of authentication actually prevents the misuse of your credit card, especially through online transactions. The dual-factor authentication process allows debit and credit card customers to validate their identity without using data visible on the card. As a result, banks and payment portals can check if the transaction is genuine or counterfeit in nature.
However, like any routine banking transaction, you have to enter thelog-inidandthepassword before this. The rationale is that a hacker cannot get access tothecustomer'suserid, password and mobile phone simultaneously. Itisalsoconvenientasa mobile phone is an extended arm for most individuals. Two-factor authentication is a broad term and can be implemented in multiple ways.
Banks could use mobile phone or a grid or a scrambled key chain as an additional security measure for net banking. For net banking, however, banks ask for the additional authentication only if an individual has to transfer money for third-party transactions.
For example, you may transfer money to your child or parents on a monthly basis. If you register them as beneficiaries, you don't have to go through the additional authentication . These transactions are low risk in nature as the hacker will only transfer money to himself and not to any of these registered beneficiaries . For credit cards, Visa and MasterCard have introduced an additional password, which is mandatory for any online transaction. The password can be set by the customer and changed at his/her convenience.
The scope for a fraudulent transaction is higher as all a hacker needs is the credit card number, the expiry date and the CVV number which are mentioned in the card itself. As per RBI's stipulations , all banks have to follow the dual factor authentication model for credit card transactions.
Click to Compare Credit Card Offers and Credit Card Reward Points

India gold loans market turns competitive

The gold loans market in India is set to witness more competition as more financial institutions and banks enter the lucrative business and safer business of lending funds with physical gold as collateral.
Kerala-based Federal Bank has announced plans to widen its network of exclusive gold loan branches in various parts of the country. It already has 60 branches in Tamilnadu and Karnataka, the first one was opened this year in January. The number of gold loan branches will rise to 80 very soon and 350 by the end of the year, Shyam Srinivasan, Managing Director and CEO of Federal Bank told a leading local daily. The gold loan business s of the bank is being promoted under its Federal Bank Financial Services Division (FEDFINA).
Public sector banks have now started offering competitive rates for gold loans for agricultural purposes with Canara Bank offering loans for a low rate of 5% per annum while other major banks are offering from 6-8 per cent interest rate per annum. New generation banks such as HDFC Bank and ICICI Bank have also come in the forefront promoting gold loans for the common man.
Bankers say the default rate is much lower for gold loans because Indians do not want to risk losing their family jewelry. And unlike traditional personal loan, no credit checks are needed for gold loans.
According to estimates, the organized gold loan market in India stands at Rs 350-400 billion and has grown at an compound annual growth rate of 40% during 2002-2010 and is expected to grow at an annual rate of 35-40% over the next three years.
Meanwhile, Muthoot Finance Ltd, India’s largest gold financing company whose Initial Public Offering (IPO) was heavily oversubscribed and subsequently listed in Bombay Stock Exchange (BSE) this month has announced plans to take gold loan business abroad.
The company is planning to set up about three or four branches at UK this year to target the large Asian immigrant population in the region for its gold loans business. The group already has a presence at England, through Muthoot Global Money Transfer, which provides cash transfer and remittance services to countries like Sri Lanka, Pakistan and Bangladesh apart from India.
With an established br¬anch network, presence of the large Asian immigrant population and the popularity of gold as an investment class in the community will be an advantage for the company as it tries to expand its gold loans business outside the Indian market, Muthoot officials said.
Muthoot Finance Ltd, registered a growth of 117 % in its net profit to Rs. 494 crore for the financial year ended March 31, 2011, as compared to Rs. 227 crore of the previous fiscal. The gold loans outstanding till March 31, 2011 is 15728 cr which is 114% higher than corresponding period in 2010. Total gold pledged with Muthoot Finance Ltd has risen 72% in FY 2011 to 112 tonnes.
In a recent development, Cholamandalam, Investment and Finance Company Ltd (CIFCL), part of the Murugappa group ,has decided to enter the lucrative gold loans market and will initially target Andhra Pradesh, Tamilnadu and Kerala which together account for over 40% of the Indian gold loans market. It would focus on the Rs 30,000-50,000 income bracket, and would lend up to 75-80 per cent of the value, company officials said.

SBI focuses on investor confidence after Q4 earnings

State Bank of India (SBI) will mitigate risk on its agriculture portfolio by buying insurance cover for all crop loans.
The nation’s largest lender, which had almost doubled bad assets in farm loans in fiscal 2011, will link the crop loans to crop insurance.
“Delinquencies will be in crop failure. In that case, crop insurance will take care of the losses,” chairman Pratip Chaudhuri said in an interview with Bloomberg UTV for Banker’s Trust programme.
The bank will also call an analyst meet in a week for a “threadbare discussion” on its dismal fourth quarter earning—a sort of soul searching exercise on what went wrong and why.
It had provided for bad loans, home loans and employees’ pension; as a result, SBI posted a Rs.21 crore profit in its fourth quarter against analysts’ expectation of Rs.3,000 crore.
The stock tanked 17% at a stretch, wiping out more than Rs.28,000 crore of investors’ worth—between 17 May, the day result was declared, and 26 May—before recovering marginally. On Monday, SBI stock rose 0.07% to close at Rs.2,236.
The proposed meeting with analysts, Chaudhuri expects, will restore confidence of the investor community, and reassure them that the weak fourth quarter earning was a one-off phenomenon.
The share of bad debts accruing from agriculture was Rs.4,524 crore, or 18% of the total non-performing assets (NPAs), or bad debts, in fiscal 2011.
The total farm loan portfolio of SBI rose 21.18% to Rs.94,826 crore in fiscal 2011 out of which 6.37% has turned bad. This is sharply up from last year’s 3.66%.
“We did not expect this,” said Chaudhuri.
“NPA in agriculture is a problem area for SBI. If they link their agri-portfolio to crop insurance and get money for crop failure related delinquencies, it solves SBI’s problem to a great extent; but it all depends on what kind of premium they will have to pay,” said Hatim Broachwala, analyst with Mumbai-based domestic brokerage Fortune Financials.
The bank has also drawn down close to Rs.8,000 crore from its reserves to set aside money to pay employee pensions.
Chaudhuri defended the move to erode its core capital.
“It is not by choice that we dipped into the reserves,” he said, adding that the bank’s operating profit was not enough to set aside the provision from. If the bank would have done that, it could have “distorted all important ratios,” Chaudhuri said.
According to the chairman, SBI is readying for an introspection of its key segments and business parameters in a bid to deal with a few critical issues such as an unprecedented rise in its NPAs, especially from farm sector, and a fall in its NIM (net interest margin) in the fourth quarter.
Sequentially, the NIM, a key parameter of profitability, fell close to 0.50% to 3.07%.
The analysts’ meet assumes importance because SBI is readying to raise capital through a Rs.20,000 crore rights issue.
Chaudhuri said being the “flagship bank” of the government, the nod for the issue will not be a problem for the bank to secure, especially when the government has given such a nod to all the other banks.
“For the government, SBI has a special place,” Chaudhuri said confidently.
Since fiscal 2009, in the wake of the global meltdown, SBI has restructured assets worth Rs.34,349 crore, close to 15% of which has turned bad so far.
Some analysts expect bad debts to rise as much as 30%.
However, the SBI chief said he is confident that recovery will not be hampered. “Restructured loans are backed by securities. The companies are cash-poor but asset-rich. Where the underlying assets are healthy, we don’t expect any deterioration in asset quality.”
“Besides, they (the restructured firms) are not fly-by-night operators,” Chaudhuri said.
Chaudhuri wants the bank’s credit growth to moderate between 16% and 17%, from 18-20% earlier, and deposits to grow at 21%.
“Our CD (credit-deposit) ratio is already at 76%. This will lend some semblance of balance,” Chaudhuri said.
The banking regulator had earlier criticized banks for high CD ratios as that makes asset liability management a challenge and may turn into a systemic risk.

Credit card operations of SBI show good results

State Bank of India has seen an improvement in performance of its credit card segment in the fiscal last ended.
After long years of losses, the credit card segment of the bank has finally borne profits and that too at a time when results have been coming negative from all segments of the bank.
The credit card business booked profits worth Rs 7.10 crore in the last fiscal as against losses of Rs 153 crore in the fiscal prior to that.
Customer card spends has increased by 30% to Rs 6452 crore, the bank said.
SBI card currently has 2.3 million cards.

Credit card transactions spike in January

Transactions worth Rs. 6,934.65 crore were carried out in India through credit card in January, 2011, growth of 27.82 % from that in the same period last year.
Credit card transactions during January, 2010 were at Rs. 5,425.51 crore, according to the RBI data.
The number of credit cards in circulation have, however, declined by over 10 % to 1.81 crore as on January 31, 2011, from 2.02 crore in the same period last year.
During the April-January period of the fiscal, the total transactions carried out via credit cards increased 21.78 % to Rs. 62,335.44 crore as against Rs. 51,188.94 crore in the April-January period of 2010-11.
Meanwhile, debit card transactions in January were up by 49.04 % to Rs. 3,712.67 crore, as against Rs. 2,491 crore in the corresponding month last year.
There were 21.82 crore debit cards in use in the country as on January 31, 2011, up over 25 % over the figure of 17.41 crore in the year-ago period.
In April-January period, the total transactions carried out by debit cards jumped by 47.06 %, to Rs. 32,029.24 crore, from Rs. 21,779.83 crore in the first 10 months of the last fiscal.

Why it is important to effectively manage your credit score

In the rapidly-evolving credit landscape, it has become almost impossible for defaulters to get a loan from banks who actively use credit bureaus. The increasing significance of credit reports to the loan seeker prompts questions like what a ?credit report/ score? is and how it affects them.
A credit report is a compilation of information about the individual and his or her credit history that has been reported to the credit bureau by those who granted credit to the individual. This report reflects details of all the individual?s loans, credit cards and other borrowings. It contains information like the date opened, credit limit, outstandings , overdues and written-off amounts among others. An individual?s credit score is generated by information on their credit report, but is not part of the credit report itself.
Credit scores can project the amount of risk posed by the individual to a lender. When lenders request an individual?s credit report, they often choose to receive a credit score at the same time, and will select which scoring model they want to use. Large lenders may use a customised scoring model. For example, for Car loan, a lender may use a scoring model that focuses on car payment history.
Lenders will typically evaluate an individual?s credit report and credit score along with other key information, such as income, against their own internal decision criteria to determine the individual?s ability to qualify for a particular loan type. In future, lenders are also likely to use the credit scores to decide on interest rates. The rates will factor in the perceived credit risk depending on one?s score.
Credit scores can change gradually over time as one?s overall credit picture gets better. This happens by consistently engaging in credit-worthy behaviour going forward, such as paying one?s bills/EMIs on time and using credit conservatively.
There are a few good habits to keep in mind to maintain creditworthy behaviour. The first one is paying bills on time. Delinquent payments can have a significant negative impact on your score. If one has missed payments, they should do their best to get current and stay current. Debt should be paid off rather than shifting it to other accounts. One should look to re-establish their credit history if they have had problems. Opening new accounts responsibly and paying them off on time may help in the long term. One should also be prudent in applying for and opening new credit accounts.
Credit cards can be kept, but they need to be managed responsibly . In general, having credit cards and instalment loans (and paying timely payments) may favourably impact your credit score in the long term. If one is having trouble making ends meet, one should contact his or her creditors. Lastly, one should keep balances as low as possible on credit cards and other revolving credit.
There are also some areas one should tread with utmost caution . One should not close unused credit cards as a short-term strategy to try to raise their score. Also, one should avoid opening a number of new credit cards, just to increase the credit available. This approach could actually have a negative impact on one?s score. If a person has been managing credit for a short time, avoid opening a lot of new accounts too rapidly. Adding new accounts will lower the average account age, which could have a negative impact on the individual?s credit score, particularly if s/he is a new credit user.
It takes time and there is no quick fix for eliminating past aspects of one?s credit history that may negatively affect their credit score. Credit scores are based on one?s credit history and can generally only be changed over time. Remember - accurate and timely negative information cannot be removed from your credit file. Your best approach for establishing credit worthiness is to handle your credit responsibly over time.

A credit card that talks to you!

Imagine your credit card talking to you and displaying your balance, while doubling as a reward card. Well, your imagination will soon turn into a reality.

Dynamics Inc is developing such cards -- due to be introduced in the US later this year -- which will have wafer- thin microprocessors and would run on batteries that can last up to three years.

However, the credit cards will only display personal information after a security code is entered.

Citibank has released the new 2G card, which has a programmable magnetic strip and buttons on the front for users to choose to use it as a credit card or just to spend reward points, the 'Daily Mail' reported.

A trial is currently ongoing and, if successful, it could roll out across the country.

Even Mastercard has just released a card that has a small LCD screen which displays a one-time code which the customer can use to make an online purchase. It means even if someone's credit card details are stolen, they will be useless to buy anything with without the one-off code.

Jeff Mullen, the CEO of Dynamics Inc which is working on several other high-tech cards, explained that the end of the magnetic strip has been mooted for years, but is still the dominant payment system in the world.

He said: "Magnetic stripe readers are being placed in more places than ever before -- like vending machines, movie theater kiosks and taxicabs. Download Songs

"Even in Japan, where the infrastructure is in place and phones (which can make payments) have been distributed for seven years, the volume of phone payments is significantly less than one per cent share of transactions.

"European chip cards comprise only about 10 % of cards in world."

Banks, phone providers, Google and Apple, are also working on mobile payment systems which rely on short-range wireless technology that allows electronic devices to transmit encrypted data.

"Although mobile payments is the future, you're not going to move all that overnight to magical phones. So these are step innovations, rather than leap innovations.

"Some are very much needed, and some are probably not going to make it," Todd Ablowitz, President of Double Diamond Group, a consulting firm on payments strategy technologies and products was quoted by the British newspaper as telling the 'creditcards.com'

Citibank reports maximum cases of debit/credit card frauds

Citibank has witnessed maximum 92 frauds of cloning of debit/credit cards or use of fake cards involving over Rs 1.89 crore from 2007-08 to December 2010.
"Largest number of such frauds belong to Citibank from 2007-08 to December 2010...RBI's committee has suggested a number of steps including replacing the magnetic strip on cards by a chip. All these aspects are being looked into," Finance Minister Pranab Mukherjee said in Lok Sabha during Question Hour.
Compensation to the victims, who lost money in these frauds, is another aspect which is being looked into by the banks.
Besides Citibank, other banks which reported such frauds are one each by Syndicate Bank, Standard Chartered, Punjab National Bank and Canara Bank in 2010 involving a total amount of less than Rs 23 lakh.
Bank of India reported one case of fraud in 2007-08 but the amount involved is huge at over Rs 1.92 crore.
Mukherjee said the Committee, headed by Executive Director, RBI has given various suggestions and a decision would be taken soon in this regard.
Besides, the RBI has also issued a series of instructions relating to Know Your Customer (KYC) to the banks so that identification could be authenticated before issuing a debit or credit card, the Minister said.
He said criminal investigations have also started against people involved in such frauds.
The RBI has issued a Master Circular on " credit card Operations of banks" recently advising the banks to set up internal control systems to combat frauds and to take pro-active fraud control and enforcement measures, Mukherjee said in his reply.
The Central bank has also advised banks to ensure that credit card operations were run on "sound, prudent and profitable" lines and fulfil "Know Your Customer" requirements, assess credit risk of customers, specify terms and conditions in clear and simple language and ensure prompt dispatch of bills.

Credit Card: Boon or Curse

Credit cards are whether a boon or a curse entirely depends on usage. On one hand it can help one out of any money problems, providing a financial lifeline and helping in case of severe cash flow problems but on the other hand they are pure temptation which can easily lead into debt trap (financial ruin).
Experts keep advising on the Dos and Don’ts, tricks and tips to use cards etc. They help you learn various ways in which you can benefit from credit cards like avoiding carrying hard cash, being able to pay for larger (expensive) items and then repay the balance gradually, and being able to cruise through temporary cash crunches.
There are few people who keep credit cards just to spend extravagantly, not for the benefits like convenience, ease, and flexibility offered by these cards. Some believe it a status symbol while few spend on cards just because they can afford to!
This kind of spending can easily lead one into a debt trap. In fact according to research this is the main reason for most to end up in personal debt. Then people are forced to take loans to tide over credit card dues and get caught in vicious circle of debt. Credit card should not be used to buy all sorts of luxuries, pay for holidays which you cannot afford. Neither should one buy the latest gadgets and high tech devices at high prices just to show off your purchases. Credit card is a responsibility. You need to look at how much you have to spend, how will you repay the money and how much interest will you have to pay.
Reports have revealed that people choose their credit card based on the credit limit offered by the bank rather than the rate of interest they would be charged. One reason for this could be the fact that they want to stretch the card limit to the maximum. One should always choose a card that gives best terms with lowest rate of interest. One should be careful in spending on a card and most importantly spend as much as one can afford. One should avoid falling into a debt trap from which it could get difficult to emerge by making diligent payments. If one is careful, credit cards will always be a Boon and never a Curse.