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.

Dangerous substances can now be conveyed from CRZs

The Supreme Court stated last week that hazardous substances could be conveyed from coastal regulation zones (CRZ) to industrial units, though an amendment to the CRZ rules totally prohibited any such movement. The 1997 amendment to a central government notification of 1991 on carrying hazardous substances from ports to the industrial units was not “happily worded”, the court said. In order to make the rule workable, the court re-interpreted the vague phrases to enable industries to carry imported hazardous substances from ports to their factories.
The court did so while dismissing environmental objections to a Rs 600 crore plant in the appeal case, M. Nizamudeen vs Chemplast Sanmar Ltd. Several public interest petitions were filed by individuals in the Madras high court and the Supreme Court against the chemical plant. The Supreme Court rejected all objections based on the CRZ rules and allowed the plant to continue production. The judgment did not deal with the plea of Chemplast company that the cases were instigated by its rival, Cuddalore Powergen Corporation Limited.
IT liability on royalty paid for software duplication
The Supreme Court has allowed the appeal of the Commissioner of Income Tax in a batch of appeals from Gujarat, raising the question of tax liability in relation to payment of royalty by Indian companies to foreign ones for duplicating software in India and supplying them to the end-users. In one typical case, Mastek Ltd claimed deduction on the royalty payment under Section 37 of the Income Tax Act. It argued that for each copy duplicated and sold to customers in India (including Reliance Industries and Air India), it had paid royalty to the US corporation based on its sale value and, thus, such payment towards royalty formed part of the expenditure incurred by it in making the sales.
The assessing officer did not agree with it and asserted that only one-sixth of the payment was deductible under Section 35A. When the company appealed, the Commissioner (Appeals) and the appellate tribunal accepted the company’s view. The Gujarat high court did not re-examine the issue. The Supreme Court remanded the case to the high court as “we are of the view that an in-depth exercise needs to be carried out to understand the actual process undertaken by the company in the light of the contract/arrangement with the US corporation.”
Credit card holder in the clear
A credit card holder who has not used his card could still move a consumer forum if there is deficiency in service of the bank which issued the card. The West Bengal State Consumer Commission said so last week in the case, Abhijit Sarkar vs SBI Cards and Payments Services (P) Ltd. The credit card holder had not used the card but substantial amounts were debited by State Bank of India from his account due to operations of miscreants.
When he moved the district consumer forum, it dismissed the complaint observing that since he had not used the card, he was not a consumer according to the Consumer Protection Act. It also stated that he had filed a first information report with the police regarding the transactions and therefore he could not move the consumer forum. He appealed to the state commission, which took a view favourable to him on both counts. It stated that filing of an FIR would not debar the person from moving the consumer forum. Moreover, even if he had not used his card, he would still be a consumer in the eye of the law.