Credit Card Borrowers face high risk of fraud in E-commerce

The illegal practice of swiping card for cash is quite prevalent amongst the trader hubs of India. "Legally, swiping card for cash is not allowed in India unlike in the UK or US. There have been rackets in the past that the police have busted," said Nidhi Gurnani, cofounder of Cardback, an app which advises buyers on their credit card usage. The other reason behind swiping credit cards for fake sales is to earn rewards.

"In accelerated reward point schemes, one can earn up to Rs 1 lakh, on a swipe of Rs 20,000, said Gurnani.

As merchants move to sell online, card for cash model is also moving to ard for cash model is also moving to the online world. "Some ecom merce companies accept digital payments for products but in stead used the cash to run op erations. They don't deliv er on time," Gupta of CitrusPay added.

Not only payment gate ways but mobile wallets have also become extremely cautious. It's eas ier to swipe money from a credit card into a bank account Users are able to withdraw cash from their credit cards at almost 0% in mobile wallets compared to up to 2% they are charged on e-commerce portals. "We allow only Rs 5,000 worth of money to be loaded via a credit card into our mobile wallet. We also take at least 3 days to transfer money to a bank account, to check fraudulent transactions," said Sunil Kulkarni, Deputy Manag ing Director at mobile wal let firm Oxigen Services (India) Pvt Ltd.

About Rs 1800 crore of transactions went through Oxigen last year, of which the company charges 1%, usually from the vendors.

SBI holiday-cum-shopping credit card with Yatra.com

State Bank of India and Yatra.com well known online travel portal, has launched a holiday-cum-shopping card that will enable Indian travelers to avail discounts across travel and holiday packages.
The new holiday card will enable travellers to avail discounts across Yatra.com travel and holiday packages, exclusive previews to its deals and benefits, including accelerated rewards on their purchases.
SBI Cards and Yatra.com are looking forward to a very positive response for the holiday credit card because card provides the best travel solutions to customers.
"As a company, we are constantly innovating to provide the best travel solutions to our customers. Our partnership with SBI Cards for the holiday card is a part of this overall approach. We are looking forward to a very positive response for the card," Yatra.com CEO Dhruv Shringi said.
The card has been designed to enable customers win reward points every time they use the card. So, the more they swipe their cards, the closer they get to their next dream holiday, he said.
"Travel continues to emerge as a growing segment for credit cards. The SBI Cards brand is based on the value proposition of 'Make Life Simple' ? the core promise of our brand. The proposition stands testimony to the company's continuous efforts of simplifying the lives of our customers,"
SBI Card mostly based on make life simple proposition. The proposition stands testimony to the company's continuous efforts of simplifying the lives of our customers,"

New Super Premium Credit Card lauched by ICICI Bank

ICICI Bank launched a credit card targeted at the super affluent. Customers will get two different Credit cards, one each from payment gateways American Express and MasterCard, but both will be linked to a single card account.
The card christened Sapphiro is the third offering in its Gemstone collection and is aimed at super affluent segment and the bank's wealth management clientele.
Customers will get two different cards, one each from payment gateways American Express and MasterCard, but both will be linked to a single card account, it added.
Details on who qualifies to get the card and membership charges, if any, were not specified by the bank in the statement.
"The Sapphiro takes the level of privileges for our super affluent and wealth management consumers several notches higher through the high-end experiential rewards on offer," managing director and chief executive Chanda Kochhar said.
Card users can joy privileges offered by Leading Hotels of the World, Atlantis the Palm, Dubai, and Air France-KLM and other offerings like Thursday night movie premieres, complimentary tee-offs at championship golf courses across the world and premium privileges across travel, shopping, wellness and entertainment, the statement said.
Click to Apply for ICICI Credit Card Online

Deutsche Bank infuses Rs.455 cr to grow Indian business

Deutsche Bank AG, Europe’s largest lender with $3.07 trillion (Rs.153 trillion today) of assets, has infused Rs.455 crore to strengthen its Indian operations. The German bank has been investing money every year in its Indian branches since 2007, with 2009 being an exception.
“The capital base pertains only to the India branches and excludes all other Deutsche Bank entities operating in India—equity broking and investment banking, primary dealership, asset management and shared services,” Deutsche Bank said in an emailed statement on Tuesday.
The latest capital infusion will take the bank’s tier I or core capital in the country to a little over Rs.5,500 crore. Tier I capital includes a bank’s equity and reserves.
Deutsche Bank’s India branches have shown a compound annual growth rate of 38% over the last five years. The German bank recently received nod from the Reserve Bank of India (RBI) to open two branches in Ahmedabad and Surat, which will take its network to 17 outlets.
The additional capital will be used to service and finance the bank’s corporate, institutional and retail clients, said Gunit Chadha, chief executive of Deutsche Bank’s Indian unit.
Corporate and investment banking makes up more than 80% of Deutsche Bank’s business in India. In April 2011, the bank sold its credit card business to IndusInd Bank Ltd, but has maintained that it will continue to invest in retail banking, although this will remain a small part of its overall business in India.
In 2010-11, Deutsche Bank’s profit in India rose 41% to Rs.630 crore, helped by rising income from advances, trading and fees. It earned Rs.1,880.16 crore from advances and investments, up from Rs.1,578.87 crore in the previous year.
This is the right time for foreign banks to strengthen their Indian businesses to service corporate clients in the country, said Manish Ostwal, banking analyst at Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
“Even larger banks such as Standard Chartered are now focusing on wholesale banking because getting permission to open branches from RBI is difficult, while helping Indian companies to get capital from abroad is their strength, which no other local bank except the State Bank of India can provide,” Ostwal said.
Deutsche Bank’s new branch licences from RBI have come after two years. UK-based Standard Chartered Plc received permission to open three branches—one each in Jaipur, Jodhpur and Thiruvananthapuram in 2010. The last time both the banks opened branches was in 2010.
In India, Deutsche Bank is the smallest of the big foreign banks in the country, including Standard Chartered, Citibank NA and the Hongkong and Shanghai Banking Corp. Ltd (HSBC). RBI distributes 12-18 branches among all foreign banks every year. SBI Recruitment 2012
HSBC and Citibank have not got permission to open any new branch in the current cycle, their spokespersons said.
India’s reputation as one of the fastest growing economies in the world has also led to lenders such as Deutsche Bank in getting capital here, Ostwal said.
“The recent ratings downgrade of the Indian banking sector has made it difficult for Indian banks to access funds and, hence, foreign banks have an opportunity to strengthen their position in areas such as foreign exchange, commodities, merger and acquisitions and structured finance,” the analyst said.
In November, global rating agency Moody’s Investors Service Inc. downgraded the outlook for Indian banks to negative from stable, citing a likely deterioration in asset quality in the next 18 months.

Credit card business will grow robustly

Marketers and market-makers in the financial services industry have for years salivated at the great Indian opportunity for growing the credit cards market.
And it indeed has been a great opportunity and will continue to be so in the coming years. A growing middle class, rising aspirations and an increased propensity to spend by an inherently young population creates heady mix of untapped market opportunity.
The credit cards industry is today coming out of what have truly been testing times. The financial crisis of 2008-2010 remains fresh in our minds. With the tide seeming to have turned finally and with the indicators across almost all key areas looking positive, if not robust, there is fresh optimism in the industry and an almost unanimous positive view that the industry is today placed well for sustained growth.
Learning from the past
Before we look forward to the future, we have to understand the past. As they say, hindsight is always 20-20. The question remains: what went wrong?
The answer lies not just in one reason but a multitude of factors which both issuers and consumers should introspect upon. Credit is, at the end of the day, a powerful tool and a truly flexible option to meet immediate expenses when cash is not at hand.
The credit card, therefore, adroitly addresses medical emergencies, facilitates holidays and travel, or fulfils the aspiration of purchasing that new television or washing machine, with the knowledge that the payment may be done in parts over a period of time, or when that bonuscheque comes in. What will be key is, how both, consumers and card issuers, will treat this extremely powerful tool?
While the global financial crises is ascribed as one reason for the fallout in unsecured lending in India, the impact was also compoundedby the misplaced market growth ambitions of some credit card issuers who wereimmersed in the mantras of market share and market expansion. With access to easy credit card facilities from over-exuberant and ambitious card issuers, customers somehow seemed to have lost the key message: that credit is an important tool, to be used with responsibility and prudence.
Future bright
The future, however, is bright. Several factors strongly indicate that credit card businesses will grow robustly in the coming years. The first is the emergence of strong credit rating agencies in India. Card issuers now have access to complete information of the applicant prior to issuing a card.
The key will be in seeing how the issuers use this information in taking prudent decisions. All information used in determining the creditworthiness of an applicant ultimately hinges on determining the ability and intention of the applicant to pay back the amount spent or borrowed. The expertise and sophistication of issuers in making such judgments, leveraging bureau data and recalibrating their own policies from time to time, will determine how the industry fares infuture.
Use the powerful tool of credit with wisdom
Customers, too, have now started understanding the importance of using credit wisely. With regulators and banks educating customers about the benefit of a good credit history, it is envisaged that better sense will prevail. Both issuers and customers now have the benefit of hindsight! Taur Mittran Di
Card issuers will have to clearly strategise as to which segments they want to operate in. Most card issuers have moved completely away from the mass market segments as the risk-reward equations have just not borne out.
Their predominant focus has been a move to mass affluent segments and high networth individuals. These segments are traditionally more robust and easier to evaluate. Credit underwriting norms have been tightened across the board. Card issuers also have to become more judicious about growing the market purely for that sake, as inactive cards can savage a portfolio.
It is no wonder that of the 28 million cards which were in the marketplace in 2008, only around 20 million exist today. While there has been a huge de-growth in plastics, there has been no slowing down the overall industry spends which have been growing robustly.
All of which goes to show the wastage by the industry in issuing cards to customers who saw no value in the product. At the end of the day, the consumer is king and will patronise a product or a brand which adds enhanced value to his / her life.Free cards, in many ways, were perceived to be free of value and benefits, and, as a corollary, have been freed of customer patronage!
Customer is king
Card issuers will now have to work extra hard in delivering enhanced value to consumers. Creating and managing sophisticated products, constantly enhancing value and innovating on service delivery, will be key drivers of future growth.
It’s a large market, so exercise care
At this stage, the opportunity looks large with a large untapped market potential. Only about 3% of the total personal consumption expenditure in India is done on plastic cards. With the government keen on moving more payments on to electronic media, the spends on plastic cards will continue to grow significantly.
The sustained growth in organised retail, the booming e- commerce space, the aspirations of one of the youngest populations in the world and the strong, globally savvy emerging middle class… all foretell that it can only be a boom time for the credit cards business in the coming years. The key will be to take measured steps based on prudence and good judgment. Let the good times begin!

SBI Cards to customise offers about spending model

Credit-card issuers are increasingly turning into financial counsellors. Come January quarter, SBI Cards, a standalone credit-card company co-promoted by India's largest state-owned bank, plans to launch ‘customised statements' to help its customers know their spending pattern, say over a year.
Based on the analysed spending pattern, which will be shared in the credit-card statements, SBI Cards will provide ‘offers' that would help its customers save on their spends.
“Our new customised statement will tell you where your Rs 100 is going. X per cent in grocery, Y per cent in jewellery, and so on, We want to help customers know how are they spending… where their money is going …and we have offers which are going to help them make smart savings on their spends,” Mr Sanjeev Jain, Chief Executive Officer, GE Capital Business Processes Management Services (GECBP), said.
GECBP handles the technology and processing needs of SBI Cards. The total number of SBI credit-cards issued and outstanding is about two million. Nearly 60 per cent of SBI Cards' customers are receiving e-statements (in electronic form), Mr Jain said.

Personal touch

Any analysis of spending patterns by SBI Cards may not be an industry first in India, but it does show how credit-card issuers are striving to provide better customer experience.
“We believe that we are in an industry where we should be working like an FMCG company works, and not as a finance company. We believe that our touch-points with customers are going to be extremely personal,” Mr Jain said.
Mr Kadambi Narahari, CEO, SBI Cards, said that the company was very customer-centric and plans to increase its presence in Tier-II and Tier-III cities in the coming months.
The credit-card industry in India is still at a fairly nascent stage. The exuberance seen among credit-card issuers prior to 2007-08 has now changed and customers have also become more financially savvy, Mr Narahari noted.

A period of turmoil

The last five years, since the outbreak of the global financial crisis in 2007-08, has been a period of turmoil for the credit-card industry in India. From a high of 27 million cards in 2007-08, the total number of credit-cards outstanding has now come down to about 18 million as of end October 2011, according to latest RBI data.
But SBI Cards is very bullish about the Indian market given the fact that it is still under-penetrated. “As consumerism grows, and as people become comfortable with plastic, the credit-card market is bound to grow. People are already very comfortable with plastic in terms of debit cards. The usage of credit cards probably would ride, in some sense, on that. Our idea here is to see how we can develop the credit-card market and make sure it grows in a big way,” Mr Narahari said.

Cheaper mortgages offer setting up chance

Although rock-bottom interest rates are playing havoc with investment returns, they offer a retirement-planning opportunity that adviser Marguerita Cheng now uses regularly: mortgage refinancing.
“For our reviews, we ask clients to bring in their mortgage statements and investment statements,” said the Ameriprise Financial Inc. financial adviser. “Since you can't control markets but can control what you save and spend, why not lock in a lower rate today and save more money for the future?”
Just last month, Ms. Cheng met with a 55-year-old client, a federal employee, who wanted to replace her 30-year 5.25% mortgage with a 15-year 3.25% mortgage so that she and her semiretired husband, a professor, could be almost debt-free once they stop working.
The couple owes $116,000 on the remaining 20 years of their mortgage, with a monthly principal and interest payment of $1,365. The refinancing not only would shorten the term of mortgage by five years but reduce monthly payments to $1,268.
“These clients have already been making extra principal payments, so if they continue, they can be fully paid off in 10 years,” Ms. Cheng said.
Given the Federal Reserve's decision last month to keep the federal funds rate in the 0% to 0.25% range at least until the end of 2014, many advisers think that replacing higher-cost debt — principally home mortgages and credit card balances — or paying it down faster, offers a savings opportunity that is more attractive than many investment returns.
In addition, advisers, worried about future inflation, feel that it's wise to lock in today's low rates.
“If you have a fixed-rate mortgage, you're happy if inflation goes up: The size of your debt gets smaller in real dollars,” said Christopher Van Slyke, an adviser with Trovena LLC. “If you have a variable-rate loan or a credit card, you're in big trouble.”

Kotak Mahindra Bank buys Barclays credit card portfolio

Kotak Mahindra Bank has acquired the non-performing portfolio of Barclays Bank’s credit card business in India. The deal, experts said, gives momentum to the sale of stressed loan market in the country which has been having a dry run following stringent regulatory norms introduced in 2007.
Last month, Standard Chartered Bank bought the performing portfolio of Barclays’ credit cards business in India. Barclays has decided to exit retail assets business in India and is also looking for buyers for its Rs 3,000 crore retail loan portfolio.
The portfolio acquired by Kotak Credit Card is estimated to be around Rs 250-300 crore and comprise nearly 200,000 cards. The private sector lender’s in-house asset reconstruction team will be responsible for recovering the dues from these accounts.
While the deal value was not immediately known, banks in India have to follow the Reserve Bank of India’s (RBI) guidelines on valuation of stressed asset sale.
According to RBI guidelines released in October, 2007 banks while selling non-performing assets have to work out the net present value of the estimated cash flow associated with the realisable value of the available securities net of the cost of realisation. The sale price, generally, should not be lower than the net present value.
Banks in India have once again expanding their credit cards businesses aggressively after a gap of nearly three years.
Standard Chartered Bank became the fifth largest credit card issuer in the country after it bought 170,000 credit cards from Barclays. The foreign lender is believed to have acquired this portfolio at a hefty discount to the book value, which was estimated around Rs 180-200 crore.
The transaction was the second buy-out in the credit card space following IndusInd Bank's acquisition of Deutsche Bank's credit cards business earlier in 2011. Yaad Teri Awarapan 2 Mp3 Song
IndusInd Bank bought 200,000 cards portfolio from Deutsche Bank including the foreign lender's operating platform, technology, and staff. The private bank launched 'IndusInd Credit Cards' on June 1, 2011 and aims to grow the portfolio four-fold to Rs 800-900 crore within three years.
"We believe after three to four years of bloodbath and washout, the credit card industry is now ready to take off once again. This is a high-risk, high-reward business, and we think if we manage the risks properly, the rewards will be higher now," Romesh Sobti, managing director and chief executive of IndusInd Bank, told Business Standard in an interview post acquisition of the cards business.
Even the established players have turned aggressive in growing their credit cards operations.
HDFC Bank, the largest issuer of credit cards in India, aims to double its portfolio in the next couple of years. The bank, which has 5.05 million cards, expects its portfolio to touch 10 million in two years, including two million cards exclusively for its women customers.
The bank also launched 'Infinia' cards last year for the uber-rich community, positioning it against the American Express, or Amex cards.
Bankers said that unlike the last time, there will not be significant erosion in the banks' asset quality, since the expansion strategies are backed by rich information on borrowers' credit histories obtained from the credit bureaus.
In September, 2011 the number of outstanding cards in the industry increased for the first time in eight months to 17.6 million. The number of cards has remained around the same level since then.

Best way to simplify credit card usage

Ajay has to first deal with the question of whether he needs multiple credit cards and, if so, how many. Having more than one card is useful when a large payment has to be made or when a particular card cannot be used.
Ideally, the cards should have different affiliations, such as MasterCard and Visa. It is also a good idea for Ajay to dedicate one card for official use, so that there is no confusion while claiming reimbursement for payments.
Since his job involves a lot of travelling, using a co-branded card that is linked to an airline will help him in official use as he can get credit for usage. Two cards for personal use and one for work-related expenses should be enough for his needs.
While reducing the number of cards, Ajay should consider retaining older cards with a good credit history since they are likely to have a positive impact on his credit score. The other factors he needs to consider include the acceptance of the card, authorised limits, billing cycles and costs associated.
The cards that he should first consider closing are those that are linked to (DJ H Jawani 2) stores or products since they add very little value and may even encourage spending.
Ajay should also set up an online payment process for his card, so that he is able to pay his bills from his bank account using the Internet or mobile banking services. Several online services enable paying bills on time, which Ajay should make use of. He should set in place a system to keep track of the expenses charged, the payment and dates of payments.
Having a place to keep credit card slips will make it easy to access them for checking against card statements. He should sign up for online/mobile reminders of due dates, online statements and payment facility. These are things that Ajay can do to continue enjoying credit facilities in an efficient manner.

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 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)

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%.

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.

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.

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.
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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.