Making card transactions goes more secure in Future

When we swipe our card at shopping malls and restaurants or use it at the ATM to withdraw cash and pay utility bills, we are under the constant threat of our cards being counterfeited. Besides, if you lose your card, someone can misuse the time lag, between your losing and blocking the card, to swipe and imitate your signature at the point of sale (POS).

• What you can do

This mandate implies that more banks would come out with chip-based cards and they would look at including more customers, rather than offering it to a select category.
State Bank of India, for example, since mid–2011, offers EMV chip credit card to almost all its new customers.
If you are an existing SBI Card customer, check with the bank. You could be entitled to a chip card on renewal.
Besides, the RBI has also said that by June 30, 2013, banks must issue EMV chip and PIN-based credit/debit cards to customers who have made at least one purchase using their debit/credit card in a foreign location.
Three, if you are a customer of a bank that currently issues chip cards, visit your branch. If you have a credit card with dated credit limits or a higher average balance which entitles you to a debit card with enhanced features, you may be eligible for an upgrade to a chip card.
Going by the guidelines, the infrastructure is expected to catch up quickly too. In fact the working group report (May 2011) mentions that about 90 per cent of the POS terminals are already chip-ready.
Says Dhruv Shah, Product Manager, Electracard Services, “While EMV-supporting ATMs are not yet available in India, switches, which drive the transaction processing at ATMs, are already geared to support EMV transactions.”
Moreover, as EMV adoption rates vary worldwide, none of the issuers give you cards that are only chip-based.
All chip cards contain the magnetic stripe at the back. So, while an EMV-compliant machine will use the chip, a non-EMV machine can still process your transaction using the magnetic stripe.
That way, at least some of your transactions will be more secure.
Plastic money has made life much easier for all of us. But unless we have had a personal experience, we don't realize how much of a security nightmare it can be. Here are a few things that will make our card transactions more secure.

• Chip cards reduce risk

Both these risks can be reduced to a great extent if you use cards that are ‘chip' based rather than ‘magnetic stripe' based and cards that require a PIN to be entered at POS terminals.
Unlike magnetic stripe cards, chip cards (also called EMV cards) use superior technology that helps guard against skimming and cloning. PIN requirement at POS terminals brings in a second layer of authentication, making misuse of stolen cards difficult.

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 %.

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."

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.

American Express Profit Rises 71%

American Express Co.'s third-quarter profits soared 71% as customers increased their spending by 14%, and receding losses from souring card loans allowed the company to squirrel away less for a rainy day.

AMEX’s results offer an insight into the rising optimism of its borrowers—mostly well-heeled consumers and companies—as the economy stabilize despite stubbornly high unemployment. The company's performance also cements the turnaround in the credit-card industry.

Like many banks that reported earnings recently, American Express is benefiting from fewer losses on bad loans, but struggling with weak demand for new loans that would lift revenue.

Lending volumes "remain below prerecessionary levels as card members continued to manage their finances carefully and pay down outstanding debt," Kenneth I. Chenault, AMEX’s chief executive, said in a statement.

AmEx shares, which were up 54 cents, or 1.4%, to $40.27 in trading on the New York Stock Exchange, fell 0.9% to $39.90 in after-hours trading.

American Express issues charge cards, which must be paid off each month, as well as credit cards that allow customers to carry a balance. Unlike most other card companies, which either lend or process the transactions, AmEx does both. Therefore, a big chunk of its revenue comes from fees it charges banks and merchants, such as grocery stores or gasoline stations, to process card payments.

AmEx reported third quarter net income of $1.09 billion, or 90 cents a share, up from $640 million, or 53 cents a share, a year earlier. Analysts polled by Thomson Reuters forecast earnings of 86 cents on $6.8 billion in revenue.

The company's U.S. card business reported net income of $595 million in the third quarter, up from $158 million a year earlier.

Lower delinquencies, a gauge of future losses, allowed New York-based AmEx to squirrel away $373 million for potential losses, down 68% from last year's third quarter. American Express reduced its reserve for losses by $959 million in the latest quarter, boosting income. For the time being, lower card balances will likely be offset by reduced loan-loss reserves.

For the quarter ended Sep. 30, the company wrote off 5.2% of its U.S. card loans, down from 6.2% in the second quarter and 8.9% in last year's third quarter. Meanwhile, 2.5% of the company's U.S. cardholders were a month behind on their payments, an improvement from 2.7% as of Jun. 30 and 4.1% a year ago.

During the recession, consumer spending slowed, eating into AmEx's transaction fees. The more cardholders charge on their AmEx plastic, the more the company earns by way of fees.

AmEx's revenue rose 17% to $7 billion, aided by the implementation of a new accounting rule requiring companies to bring their off-the-books securitized loans on to their balance sheets in fiscal 2010, and higher cardholder spending. This was offset by lower U.S. card balances, which fell 7% from a year ago to $49.1 billion.

Credit Card which satisfy your all requires

A credit card helps the user to purchase the goods and services without the risk of carry the money with them. When the purchase is made, the Credit card holder gives the card to the seller. The seller swipes the card and feeds the secret PIN number as told by the card holder. After the end of each month the card holder is provided with a statement sent from the Authority providing the details of the transactions made by the user during the month. It also provides the information about the exact date of payment of the dues. The company usually provides the customer a grace period of 20 to 40 days depending upon the amount of credit card issued by the organization. There are various type of organization that provide the credit cards like SBI, ICICI,  HDFC, ABN-AMRO etc. The company that issues the card usually charges a certain amount of interest on the amount of total purchase made by the user.
The Credit card provides various kind of benefit to the user. It allows the user to get the short term loans within a small period of time depending on the fact that the total charges are not higher than the maximum credit limit of the card. Moreover it reduces the risk of carrying the liquid cash in order to purchase the goods.
HDFC Credit cards also provide several kinds of benefits to the users. In order to satisfy the different needs of the different customer they have designed their credit cards into various categories. They have cards like Classic Cards, Special benefit Cards, Premium Cards and Commercial Cards. In the head of Classic Cards there are different cards like Silver Credit, Value Plus, Gold Credit Card, Titanium, Women Gold, Platinum Plus, Visa Signature, and World Master Credit Card. The Commercial Cards are also subdivided into several parts like Corporate Credit Cards, Corporate Platinum Credit Card, and Business Credit Card etc.
Like other credit cards ABN-AMRO credit cards provide the user the power to manage the all the finances of them. The ABN-AMRO Freedom credit cards provide different kinds of benefits like it reduces the prices of petrol at the time of making the payment. Through the use of this card the user can earn bonus points. As per the rules the customer earns one bonus points for making a purchase of more than Rs.100. This bonus points can be exchanged later on with an exciting gift hamper. It has also got different variety of cards to satisfy the demand of the different strata of the customer. The different cards are Platinum Card, Make My Trip Card,Smart Gold Card etc.
So the Credit cards provide different benefits to the different people and in this busy life every body should have the access of the cards in order to make their life more speedy.
Also Apply SBI Credit cards Online

Credit card companies offers good plans in festive season

What most spenders like about the festive season is the huge discounts, attractive schemes and offers most consumers durable companies come out on their products and services. With the economy picking up and the credit card usage increasing once again, card issuing companies too have tied up with various brands to offer tempting discounts, cash back offers, finance schemes.
And these offers are not just applicable on credit cards alone but are extended to some debit cards as well. “Apart from offering bonus points over and above the regular reward points earned on spending on the ICICI Bank credit cards and debit cards this season, we have come out with exclusive discounts on lifestyle and electronics too, “ says an ICICI spokesperson.
During the coming week, when you go shopping make sure you corner those extra savings and rewards that your credit card can offer you.
Apparel: You can avail discounts of up to 10% if you swipe your HSBC credit cards and Axis bank to purchase clothes. HSBC, for instance, has come out with festive scheme — Happy Swipes, where its credit and debit cardholders are eligible for cash back of 5% on making any purchase from Fabindia and Jashn stores on a minimum transaction of Rs 2,500 and Rs 5,000, respectively.
In case you wish to pick something from Star Bazaar this season, you can avail 5% cash back on a minimum spend of Rs 1,500. Under the cash back offer, the money gets credited to your account after the purchase has taken place. Similarly, by making a minimum purchase of Rs 3,000 on your Axis bank credit or debit card, you can avail additional 10% discount on purchase of any apparel at Central and Pantaloon outlets.
Dining: There is something for your palate too. As an American Express cardholder, if you book a flight to Hong Kong through Cathay Pacific Airline this month, and can participate in the “Hong Kong Wine and Dine Festival”, which is being organised from October 28 to October 31, you would get a free wine pass. However, if you travel first or business class (card), you would receive 5 wine tokens in addition to it.
Travel: If you are in a holiday mood this season, make sure you book tickets online. Several credit card issuers like HSBC and SBI have tied up with online travel portals like makemytrip.com, ezeego1.com for cash back offers of up to 30% on booking through them.
Under IRCTC and SBI card tie-up, you are eligible for refund up to 17% on all hotel and railway bookings, if the transaction is worth Rs 7,500 and above. Also, you can earn discounted tickets this season by using your card. Under the ‘Bonus Pe Flying Bonus’ offer by SBI cards, you can earn one discounted Kingfisher airline ticket if you swipe your card for purchase worth between Rs 60,000-one lakh.
Any purchase above Rs 1 lakh can get you two such tickets. “These offers are for both new as well as existing cardholders, provided the new cardholders have enrolled within the offer period,” says Abhay Kumar Singh, CEO, SBI Card. Similarly, you can save up to 10% on the base fare of your GoAir ticket by using your HSBC credit or debit card.
For your city travel you can make use of your Indian Oil Citibank credit card wherein you will get free fuel worth Rs 300 (maximum Rs 600) on every spend of Rs 30,000 on the card. The free fuel would be credited as Turbo Points to your card and will reflect in your credit card statement. The scheme, which has been running under its special offer is valid till the end of November.

LIC HFL Financial and United India Insurance ties-up

United India Insurance Company Ltd and LIC HFL Financial Services Ltd, a fully owned company of LIC Housing Finance Ltd, on Monday announced a strategic tie-up to distribute non-life insurance products at an event in Mumbai on Monday.
As per the terms of agreement, LIC HFL Financial Services will undertake non fund-based activities like marketing of housing loans, insurance products, credit cards, mutual funds and other third-party products. The company has established marketing units at 33 different centres across the country.
RR Nair, director and chief executive officer (CEO) of LIC Housing Finance, said, “Our main focus is on retail and we aim to provide innovative products at economic prices.”
Shobana Murli, CEO of LIC HFL, announced their stated goal was to reach 20,000 homes this financial year.
The government-owned United India is one of the fastest growing non-life insurance majors in the country, second in terms of business net worth (which is currently pegged over Rs 4,000 crore) and solvency margins (3.41 per cent). The company posted a net profit of Rs 707.79 crore in 2009-10.
As per the current norms of the insurance regulator, a company is permitted only two tie-ups – one with a general product firm and another with a life insurance company.
LIC HFL Financial Services can already boast of being the frontrunner in terms of disbursements and sanctions for home loans for 2009-10. Currently, the firm receives 10-12 per cent of its business through corporate agents. A LICHFL Financial Services official said that the company expects to achieve business worth Rs 1,000 crore within a year of its launch.
”For the financial year 2009-2010, the firm saw a net worth of Rs 3,000 crore, with a target to touch Rs 6,000 crore by FY 2010-2011. Of this, Rs 1,000 crore would be attributed to new business generated by this association.” said Nair. “The non-life insurance market is growing in tandem with the economy. Great growth prospects are also seen in the retail segment,” he added.

International credit card fraudsters under arrest in Ahmedabad

Timely thinking on the part of a mall manager helped crime branch sleuths nab a duo with fake international credit cards on Sunday. Further, it saved at least nine NRIs from being duped by a gang reportedly operating a fake international credit card racket in London, and apparently in various other countries as well.
Crime branch officials caught 28-year old Kinjal Joshi, a resident of Prerna Viraj Tower-II in Satellite, and his friend Jay Joshi (29), a resident of Shastrinagar in Naranpura. The two had been shopping at the city's Central Mall with a forged credit card. Later, the police allegedly discovered eight more fake credit cards from the two.
As per the chronology of the incident, the two accused made some purchases from the mall on Saturday afternoon. They produced a credit card for the payment. However, while one of them signed on the printout of the bill, the accountant noticed that the signature was not tallying.
"Staff members at the counter sensed that something was wrong with the card. They immediately informed their manager. They then informed an Axis Bank official, as it is an Axis Bank
swapping machine that is being used in the mall," said a crime branch official.
The mall's manager Ashish Gargi reportedly informed the police after verifying that the card was forged. When the police arrived, they are said to have discovered eight other such cards from the two.
According to the police, Kinjal and Jay used to live in London in a rented apartment, four years back. They were students, pursuing an MBA programme. Later, Jay returned to Ahmedabad, and is said to be presently unemployed. Kinjal, on his part, works as a deputy manager in a casino in London. He is reported to have arrived in the city a couple of days back, to meet his family.

Usage of debit cards ups as compared to credit cards

Indians are using more of debit cards than credit cards for their banking transactions, says the Reserve Bank of India (RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42 per cent at Rs 26,418 Cr in the last fiscal from Rs 18,547 Cr in 2008-09, it slipped by 4 per cent for credit cards to Rs 62,852 Cr from Rs 65,356 Cr.
In the same period, the number of debit cards in circulation has also increased by 33 per cent as compared to a fall in credit card circulation by 10 per cent over the previous year.
The total number of debit cards increased to 17 Cr in 2009-10 from 12.8 Cr in 2008-09. On the contrary, the total number of credit cards went down to 23.4 Cr in 2009-10 from 25.9 Cr in 2008-09.
“Shopping through debit card has become more convenient now due to rise in point of sale terminals in various shopping centres,” says Subrat Pani, business head- cards, Kotak Mahindra Bank. "Volume of transaction has increased due to easy availability of debit cards, which are given with every newly opened bank account."
Industry experts also attribute the popularity of debit card to the cautious attitude of Indian consumers as a result of the recent economic downturn.
“While debit card can enable the consumer to track their spending better, it is also a great payment tool for those who are credit averse or are not credit worthy,” says a senior official at VISA, who did not wish to be named.
Downturn in the economy was the major reason for negative trend in credit cards. “During the slowdown, banks became cautious in issuing new credit cards to check defaults. Also, last year many lost their jobs which led to the decline in spending through credit cards,” said Pani.

Credit cards hit retail loan business

In the dispensation of retail loans, banks increasingly find their hands tied by the credit card history of applicants. The repayment history of all credit card holders is recorded by Credit Information Bureau (India) Ltd (Cibil) and disseminated among banks.
Both public and private banks told Financial Chronicle that taking decisions on retail loan applications was becoming problematic as credit card defaults had increased and loan applicants’ record showed up on their computers. But the disputed accounts were not mentioned in the history.
Bankers said there had been many cases where the ‘defaulters’ might not have been at fault, as credit cards were thrust on them, and charges piled on them even while their cases were under dispute. Routinely dubbing them ‘defaulters’, card-issuing banks promptly sent adverse reports against them to Cibil.
Cibil, the credit information company formed in 2004, hosts the credit record of borrowers of virtually the entire lending spectrum of the country -- banks, non-banking financial companies (NBFCs) and financial institutions. The credit history of a loan applicant is made available to lenders to minimise fraud and check potential defaults.
Expressing concern at the trend, an official of the retail lending division of Punjab National Bank said loans were often refused, and applicants asked to sort out the matter with the card issuer or approach Cibil.
“We are witnessing a high incidence of adverse reports. It is an issue of concern for us and the industry in general,” he said.
G S Rekhi, chief general manager of credit at Punjab and Sind Bank, has had a similar experience. “We are facing a serious problem due to instances of credit card defaults reported by Cibil. An increasing number of our loan requests are getting blocked due to the adverse credit card history of applicants,” Rekhi said.
Arun Thukral, Cibil managing director, admitted most of the problems were on the credit card front. “We are working to improve the reporting system where disputed accounts will be brought to the notice of lenders,” he said. Thukral did not want to put a number to the cases of what he called “credit card challenges”.
Lending institutions said they did not keep a statistical record of loan denials. However, an extent of the malaise can be gauged from the report of the banking ombudsman, whose office deals with complaints of bank customers. The report for 2008-09, which was released by the Reserve Bank of India in February, points out that credit card-related complaints accounted for 26 per cent of all complaints which numbered 75,000 during the year.
The number of credit-card complaints itself increased by over 74 per cent during the year, showing an uptrend. “The types of complaints continue to be those related to issuance of unsolicited credit cards, unsolicited insurance policies, recovery of premium charges, charging of annual fee despite the cards being offered free, issuance of loans over the phone, disputes over wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, abusive calls and excessive charges,” the report says.
The report may not give the full picture, as many customers do not approach the ombudsman, choosing instead to try and settle with their banks.
C S Jain, head of personal banking at IDBI Bank, said that often the problem was due to outdated records with Cibil. “The pace of updation of Cibil records appears slow. We have come across cases where the Cibil report points to a default but the individual concerned has a letter showing a settlement having been reached with his bank months earlier,” Jain said.
Cibil’s Thukral denied delays, saying his organisation constantly updated its database. “We have upgraded our system over a period of time. Today, it takes barely three or four days to upload data we receive. The data must be fresh and we have to depend on what lending institutions provide. Earlier, data were provided to us on a quarterly basis but now it is done every month. The task is enormous. We host borrower data from over 200 lending institutions,” he said.
IDBI Bank’s Jain said his bank had instructed its staff that adverse credit report showing defaults of up to Rs 5,000 should be ignored where prima facie it appeared that the borrower was not at fault. “If defaults are bigger, then we certainly take cognisance of the Cibil report. Wilful default is a clear indication of how a borrower will behave subsequently,” he said.
The Punjab National Bank official spoke of instances when they ignored the Cibil report “if we feel that these are cases of forcibly sending cards and compounding of charges. Otherwise, we ask the borrower to approach Cibil with the facts and get the data rectified,” the official said.
A State Bank of India official dealing with retail loans, however, said Cibil’s report was useful to the system. “It is a question of being able to correctly interpret the report. Banks have to learn how to assess the payment ability and likelihood of default based on the report. The entire credit information system functions on the basis that it lets the rest of the system know about what’s going on elsewhere. We are still in a nascent stage,” he said.

Private cabs to accept cards payments soon

You need not bother about carrying cash the next time you take a private cab in the city. Around 3,000 cabs will offer payment by credit card by June-end.
With Easy Cabs and City Cool Cabs having started the credit card facility recently, other operators like Meru, Mega Cabs and Gold Cabs plan to offer this payment option to passengers soon. While Meru is in the process of importing hightech swiping machines from Italy, Gold Cabs will offer card payment facility from next week onwards. Mega Cabs will launch the service from June 10.
Meru CEO Rajesh Puri said, “Mumbai is a commercial hub and there is a daily influx of business travellers from across the world. It becomes difficult for passengers to pay in Indian currency. Also, the card payment option would be easier, convenient and faster.” Meru already offers the card payment option in Delhi, Hyderabad and Bangalore.
Mega Cabs vice-president Vinod Mishra confirmed that there was a huge demand from passengers for the credit card payment facility. “ While giving us feedback, passengers who hire vehicles for official purposes request for the credit card payment option. We have decided to introduce the facility in all our vehicles ,” he said.
Gold Cabs CEO Arun Sabnis said that installing a card swiping machine was an expensive affair. “But due to public demand, we will instal swiping machines in each vehicle,’’ he said.
Easy Cabs officials claim they are the pioneers in introducing the credit card system in Mumbai cabs.
Vijay Agunde, proprietor of City Cool Cabs, said he offers credit card facility only on request, installing the machine on a temporary basis. “The machine costs Rs 25,000 and there is a possibility of drivers misplacing it. I cannot take this risk,” he stated. Star Taxis also plans to introduce the facility in near future.
“Every private taxi operator will have to switch to card payment soon. These days, you will find a passenger carrying not one but at least three to four credit cards in his/her wallet,’’ Sabnis added.

Number of credit card holders slips to 18.3 mn in March: Fewer swipes

The number of credit cards in circulation fell below the 20-million mark in March, as issuers continued to cull inactive and defaulting accounts and focus instead on increasing spends.
The country’s credit card population fell to 18.3 million as of end-March from a peak base of 28.3 million in April 2008, according to data released by the Reserve Bank of India. In the last financial year, 6.04 million cards were put out of circulation. This is in addition to nearly 3.61 million credit cards being cancelled in 2008-09. So, over two years, nearly 10 million cards have gone out of circulation.
This is the first time since August 2006 that the credit card population has declined below 20 million.
As the economy slid into a downturn, unsecured portfolios of banks such as credit cards and personal loans were severely affected. As part of a firefighting exercise, banks began to cancel inactive cards and close accounts they feared would default. The country’s largest private sector lender, ICICI Bank, cut its base from a peak of more than eight million to about five million at present. Late entrants into the credit card space such as Barclays Bank and Axis Bank were also affected.
However, issuers have since become optimistic and have resumed new card issues from the second half of 2009, while simultaneously culling inactive and defaulting accounts. Some like HDFC Bank remained bullish and continue to issue 70-80,000 cards every month. HDFC credit cards has the second largest card network in the country, with 4.3 million cards as of March 31.
Rather than increase the numbers of cards, issuers are trying to increase the spending on each. Standard Chartered Bank has seen its monthly credit card spending increase from Rs 250 crore last year to Rs 400 crore. “We are aiming for a target of Rs 500 crore per month soon. Ours is a highly rewards-driven programme, concentrating on what works with customers,” said Shyamal Saxena, general manager of retail banking at StanChart.
The focus on getting fewer customers to spend more is reflected in the numbers. According to RBI data, customers spent an average of Rs 2,685.97 per transaction in 2009-10, up from Rs 2,518.4 in 2008-09. In 2007-08, customers spent an average of Rs 2,540.9 per swipe.
Bankers say the market has also shifted towards the high-end, less susceptible to delinquencies. “The focus for the last three years has been the premium segment and losses from this segment are significantly less than from other segments,” said a senior executive of a large foreign bank.
While the pool of premium customers is much smaller than the mass segment, high-end customers make up by spending more. “I would prefer to have 5,000 high-end customers rather than 20,000 premium segment customers,” the executive added.

LIC launches credit card protection service

LIC credit card holders can now report loss any of their cards from anywhere in the world to a 24-hour helpline launched by LIC Cards Services.
"LIC Cards Services Ltd has launched Card Protection Plan for its credit card customers in partnership with CPP Assistance Services... and it safeguards all of the LIC cardholder's payment cards - credit, debit and ATM cards," the company said in a statement.
It said members will also be able to register their non-financial cards such as store cards, loyalty and membership cards.
Besides, customers will be able to retrieve important details on lost/stolen documents like passport, PAN and driving licence.
CPP said, meanwhile, that to avail of the new service, customers would need to purchase a membership plan offered by LIC and register their cards.
It said membership plans have two offerings with annual fee of Rs 995 and Rs 1,295. "The difference between the two is in the Assistance services limits and fraud protection limits provided to the consumer," it added. People can also opt for a joint membership plan.

World Miles credit card launched by Deutsche Bank

Deutsche Bank World Miles Credit Card - Deutsche Bank announced the launch of World Miles Credit Card in India.
The credit card mainly created to cater to regular domestic and international travelers, will automatically enroll customers in a travel-focused loyalty program called 'WorldMiles' enabling them to earn and redeem miles across any airline in the world.
Launched in association with Loyalty Rewardz and Ezeego, the loyalty program 'WorldMiles' is an airline-independent frequent flyer program- the first of its kind in India.
Deutsche Bank World Miles Credit Card has been launched in two variants, viz. World Miles Signature Credit Card and World Miles Platinum Credit Card. World Miles Signature Credit Card offers 3 Spend Miles for every Rs 100 billed, while the World Miles Platinum Credit Card offers 2 Spend Miles for every Rs 100 billed on the card.
This unique program allows customers to earn miles in three forms: Flight miles, Spend Miles, and Partner Miles which accrue in one single account and can be used to redeem free airline tickets across any sector, domestic or international, and on any airline.
Shameek Bhargava, Managing Director, Head of Cards - Asia Pacific, Deutsche Bank said, "At Deutsche Bank we continuously innovate to enhance value for our customers through products which meet their needs, and seek to surpass expectations.
The World Miles card is one such offering which provides customers an opportunity to earn miles independent of any airline and also consolidate the accruals in one single account. The fact that it is airline independent also means that there is higher rate of accumulation which quickly leads to achieving redemption miles and thus, free airline tickets."
The credit cards also offer value additions like country-specific SIM cards for savings in international roaming charges from Matrix cellular Services, Airport lounge access and comprehensive international travel insurance.

Dhanlaxmi Bank credit cards Launched

Thrissur-based Dhanlaxmi Bank entered the retail resources business with the launch of Dhanlaxmi Bank Platinum and Gold Credit cards. The Credit card are targeted at its premium customers.

As well, the bank for the first time in India is introducing a ‘Pay by Transaction’ billing mode for credit cards. Under this, instead of a monthly billing cycle, the interest-free credit period is considered for individual transactions from the day of purchase. A customer thus enjoys a 45-day interest-free credit period on each purchase and does not need to time the purchase based on the billing cycle.

Speaking at the launch, Amitabh Chaturvedi, MD and CEO, said retail asset would be an important element of the overall growth strategy and the bank intended to launch a number of innovative, customer-centric products in the coming financial year.

The bank will also provide several other benefits like 5 per cent cash back on grocery purchases, priority pass - valid for over 500 lounges and a worldwide concierge services for all its credit card customers, the release added.

Credit cards related complaints increased in 2008-2009

The report said RBI has started taking ‘class action’, by issuing general directions to all banks to protect their customers. Such general directions are issued by the controller in cases that could benefit not only the applicant, but all those consumers similarly placed without having to move toward their respective banks.

The report said RBI has initiated class action against a foreign bank regarding the mode of calculation of interest rates on deposit accounts. A PSU bank was advised to recalculate interest rate on all housing loans as per terms of agreement entered into with all the borrowers without their application for relief. Yet another PSU bank was asked to recredit insurance premium that was debited to savings bank account holders without their agreement under the group insurance scheme.

Customer complaints relating to credit cards amounted to 17,648, comprising 26% of the total complaints in 2008-09 and up 74% from the previous year. However, it may be noted that the user base of credit cards rose during 2008-09 — from 137.2 million to 170 million, up 24%. RBI pointed out “that does obviate the need for better service and transparency at the point of sales by banks”.

The types of complaints pertaining to credit cards continue to be those related to issuance of unsolicited credit cards and insurance plans forced on cardholders for which customers are subsequently billed. There are also complaints where customers were offered free cards and subsequently billed annual charges for them. Other complaints include the bank’s inability to write off the card balance against the credit insurance cover after the cardholder’s demise.

A general source of these complaints continues to be difficulty in accessing the credit card issuers and the poor response from the call centres.

Choose the right Credit Card

Credit card is one financial product if handles properly then definitely you will admire it the most. It is a good alternative to make payments when you are short of cash.
But choosing a right card could be quite a challenge. There is a wide range of choice that is available in the market like Standard, Premium, Silver, Gold, Platinum, Titanium etc. You just need to play it smart -- rather than falling prey to the spiel, walk the extra mile and choose the one you want. You need to pick the right card; there are different types of credit cards stack up on interest rate and other features.
The important factors that decide whether you will get a credit card are your residence and your profession. If you reside in a locality that is blacklisted (on grounds of poor credit history) by the card-issuing bank, chances of your getting a card are less.
Banks are also hesitant in issuing credit cards to individuals in certain professions. Also, if you have been servicing other lines of credit, the bank will take a look at your credit history. Lastly, the credit limit the bank gives you is, in most cases, a function of your profile.
A basic question that you need to ask yourself is why exactly you need a card. Before you apply for credit card you should have a look at the below mentioned Credit Card Offers.
A) High fuel consumption: - In case you travel a lot through your vehicle then a card, that offers no surcharge in petrol purchase will be a good card to go for. Most commonly Titanium cards offer no surcharge while purchasing petrol. In case you are not eligible for a Titanium card, the next option should be a Gold card.
In different cards the surcharges are wavered at a particular range like from Rs.400 to Rs.4, 000. It means if you purchase fuel less than Rs.400 then there won’t be any waver in surcharge and if the transaction is more than Rs.4000 then again there won’t be any waver.
Few example of credit cards that offer no surcharge are Citibank Indian Oil Credit Card, ICICI Bank, ICICI Bank HPCL Gold Credit Card,
B) Traveling through Air: - In case you travel through flights then you should go with a card that offers discounts while traveling. A card like Platinum is one of the examples of credit card that offers special discounts to there card holders.
Few banks that offer travel discounts on there credit card are Abnamro Bank’s -Smart Miles Titanium Credit Card, ICICI Bank-British Airways American
Express® Credit Card, Singapore Airlines
VISA Platinum Credit Card, Citibank-Jet Airways Platinum credit card and many more.
C) For Shopping:- If you are a shopaholic then, your choice of card should be in such a way that you get the maximum out of your shopping, may be in a form of cash back, reward points or gift voucher. While shopping through your credit card you can actually earn, it’s just that you should be aware of the offers available on your credit card.
Few banks that offer shopping discounts on credit card are Citibank- Cash Reward credit card, HDFC Bank- Women credit card, Axis Bank-Gold & Platinum credit card and many more.
Beside above factors you also need to check the charges taken at the time of late fee, revolving the payment and etc.
Remember, once you have started using a credit card; make every effort to pay the total amount due in full before the due date of payment. Delay in making regular payments not only affects your credit history; it also does not let you make use of the free credit days' facility.

20 lakh credit cards flushed out by March 31: Banks

Around 20.35 lakh credit cards will be flushed out of the system by March-end, according to a study done by Venture Infotek, India’s leading payment solutions provider. It has shown a sharp drop to 226.64 lakh cards by March-end, from 246.99 lakh cards as on March 2009, says the report titled ‘Payment Card Industry 2009’.

On the flip side, banks will increase their debit card count by 358.44 lakh cards to end the year with 1,732.75 lakh debit cards, says the study.

Leading the bandwagon to reduce credit card count is ICICI Bank, which will cut close to 15 lakh credit cards by the end of the financial year — to 55 lakh cards from 70 lakh as on March 2009.

The report, published annually, shows other leading banks too are reducing their credit card counts. While State Bank of India is slashing its credit card count from 27 lakh to 25 lakh, Citibank is reducing it from 25 lakh to 18 lakh. ABN Amro will reduce its card count from 13.05 lakh to 10 lakh while Standard Chartered will slash it from 13 lakh to 11 lakh by the end of present financial year.

“Banks have realised that it is not easy to run a credit card business in this country as losses for some of the leading players had peaked to almost 30-35 per cent in the past. Hence, most banks are reducing their credit card exposure,” said Abizer Diwanji, an executive director (banking) with KPMG.

While there is a sharp drop in the total number of credit cards, some banks such as HDFC Bank, HSBC, Barclays credit card, Axis Bank and Canara Bank are being gung ho about increasing their credit card portfolios. According to the report, around 9.77 lakh cards will be added by these five banks.
Interestingly, all banks have seen a surge in their debit card portfolios. “The industry is expected to add around 358.44 lakh debit cards by the end of the present financial year,” the report said. SBI, ICICI Bank,

Axis Bank, HDFC Bank and Punjab National Bank are among the leading banks that are likely to see biggest surge in their debit card portfolios.

According to the head of cards with a leading private bank, the surge in debit cards is mainly on the back of a rise in the number of new accounts.

To drive their transaction banking business, Indian banks have been aggressive about adding ATMs in the country. All the 39 banks covered under the survey are together expected to increase ATM counts in the country to 58,850 by the end of March 2010.

“ATMs are expected to grow by 35 per cent during 2009-10 while SBI alone is expected to add close to 9,000 ATMs,” the report says.