Abstract:

With the affluent class growing at 25% p.a. and spending on an average 10 times more than a typical consumer, all banks are focusing on their Platinum offerings.

Article:

Banks seem to be seeing more colour in the silver-white of platinum than the bright yellowness of gold when it comes to credit cards — as being shown by their growing focus on the premium segment of customers for credit lending instruments.

The shift comes amid credit card companies seeking to tap the growing population of affluent people who, according to industry estimates, spend about Rs 3.6 lakh a year, 10 times more than the average consumer in the country. There are about 15 lakh people under this category in the country and the segment is increasing rapidly at a rate of 25% a year.

Abstract:

The tightening of interest rates in the market has seen all top credit card players hike rates on their credit card products as well. The annual increase in rates works out to approx. 3% p.a.

Article:

Rising EMIs for housing loans have hogged the headlines because of the pain experienced by homeowners, who had borrowed in a benign interest rate regime. But not paying the credit card bills in full has also become costlier, though with far less visibility. A sharp hike in interest rates by credit card companies in the past few months has gone almost unnoticed. Most of the major card issuers including ICICI Bank, SBI Card and other leading players have increased interest rates by 3-5% over the past 2-3 months.

Credit card companies charge interest if a customer carries forward credit beyond the payment cycle. The monthly rate could be between 1% and 3.4%, translating to 12-42% on an annual basis. With overall interest rates rising, card companies have also effected a hike.
ICICI Bank, the largest issuer of credit cards with over 7.5 million live cards, has hiked interest rates from 2.9% to 3.15%. This translates into an annual increase of almost 3%. “We have increased the interest rates on credit cards last month, which will be effective for the billing from August. Impact on the consumers will be known only in September. The hike is a consequence of the general tightening of interest rates and most big players have already done it. ICICI was in fact the last to do it,” said Sachin Khandelwal, head of ICICI Bank’s cards portfolio.

SBI Cards hikes rate to 3.1%

SBI Cards, the JV between SBI and GE Money and the second-largest issuer of cards in India, has also increased rates. However, the company has different rates based on parameters like spending and payment behaviour. The charges have gone up from 2.99% to 3.1%. “SBI Cards charges interest rates ranging from 0.99-3.1% depending on the spending pattern and payment behaviour of the consumer,” SBI Cards & Payment Services CEO Roopam Ashthana said.

Experts say, other major credit card issuers have also hiked rates in line with leading players. With some companies not mentioning the interest rate charged on the monthly statements sent out to customers, these rate hikes often go unnoticed by consumers. However, some companies do send out advisories.

“All applicants are advised of the maximum interest rate chargeable at the time of application, at the time of card issuance and thereafter every month in their credit card statement,” Mr Ashthana said. Provision for a change in interest rates is provided for in the terms and conditions given to a consumer at the time of issue of card.

Abstract:

In line with its strategy to tap tier II cities and towns, SBI Cards is going to ramp up its presence to 150 cities by March 2008.

Also, bank has witnessed encouraging growth from non-metro West and South markets, where it feels, exists a higher understanding of credit cards as a product.

Article:

SBI Cards, a joint venture between SBI and GE Money, expects to ramp up its geographical presence to 150 cities by end-March 2008, its Chief Executive, Mr Roopam Asthana, said.

Currently, SBI Cards has a presence in 110 cities. “Our endeavour is to reach 150 locations by March next year. We feel the potential for credit cards is going to be less beyond this number of cities. You will see a slowdown in terms of new cities coming in after we hit the 150-mark,” Mr Asthana said.

SBI Cards had recently entered Siliguri in the North-East and is now looking at Gangtok, he said. Mr Asthana said that non-metro South and West have been very good in terms of business as the ability to understand credit cards as a product is very high in these areas.

SBI’s recent announcement to enter into merchant acquiring business is encouraging, Mr Asthana said. “The less number of terminals for card acceptance has been a big challenge for the credit card industry. It is this infrastructure issue that hampers the growth of credit card business in the country. SBI’s announcement to enter merchant acquiring business will encourage us to go into the markets where terminals are going to be coming up and together we can do more business in those markets.”

Mr Asthana said that SBI Cards was looking for tie-ups with players in organised retailing and the health care industry, where card spends are likely to rise. SBI Cards has no immediate plans to tap the capital market, Mr Asthana said. However, the company would look at mixture of equity and tier-II capital for raising an estimated Rs 100 crore of additional capital required to fund business growth this fiscal. In the current fiscal, SBI Cards has already done one round of tier–II capital mobilisation amounting to about Rs 85 crore.

Abstract:

Jumping on to the premium segment cards bandwagon, SBI Cards has launched two new cards – the ‘SBI Platinum Card’ and ‘SBI Gold & More Card’. With this, its card portfolio is now at 17 different cards.

Article:

SBI Card, a joint venture between State Bank of India and GE Money, on Thursday announced its foray into the premium credit card space through the launch of the ‘SBI Platinum Card’, in association with Visa International.

The SBI Platinum card would allow a customer certain international and domestic travel benefits, including Concierge services, waiver of the 3.5 per cent surcharge on spends made abroad in foreign currencies, privileges on restaurants and spas and travel insurance.
The SBI Card CEO, Mr Roopam Asthana, said that he expects at least 1,00,000 SBI Platinum Cards to be issued this fiscal.

In addition to the Platinum Card, SBI Card also announced the launch of the ‘SBI Gold & More Card’, in association with MasterCard Worldwide. Under this product offering, SBI Card will offer assured 2 per cent cash back on any purchase at departmental stores, restaurants etc besides utility payments. Another benefit is the waiver of the 2.5 per cent surcharge on fuel purchases at any petrol pump in any city.

Prior to the launch of these two products, SBI Card’s product portfolio comprised 15 different cards.

Additional capital

On capital raising to fund business growth, Mr Asthana said that SBI Card was looking at raising additional capital of Rs 100 crore in the next 12-14 months.
In March this year, SBI Card & Payment Services had increased equity capital from Rs 100 crore to Rs 250 crore.

 Abstract:

In an effort to boost its card distribution, Deutsche Bank is looking at programme partners and co-branded cards in the retail and telecom segments.

Article:

Deutsche Bank wants to ramp up its distribution for credit cards to 25 cities and is in talks with prospective programme partners with strong distribution network for this purpose, its Head of Credit Cards-Asia Pacific, Mr Shameek Bhargava, said.

The bank’s credit card business in India is little over a year old and already has issued over 2,50,000 cards. Currently, Deutsche Bank operates out of seven cities including Kolhapur and Aurangabad, where branches were opened recently.

Programme Partners

“The key is distribution to other cities. Besides frequent flyer, our focus on co-brands would also be in retail and telecom segments.We are in talks with programme partners in both retail and telecom segments for co-brand arrangements,” Mr Bhargava said.

The Miles & More credit card launched on Wednesday in association with Visa International was the first co-branded for Deutsche Bank cards in India.

Abstract:

How credit card companies are doing all they can to rope in the young – and how it might be a better idea for parents to deal with credit cards for kids just as they deal with online social networking sites.

Article:

A decade ago, when someone asked me if a high school student should have a credit card, my answer was a resounding ‘No.’ You might say I’ve made a 180-degree turn to the dark side. No, I’m not getting paid by the credit card industry. I think those companies are a potentially dangerous enemy, and you have to prepare your child to be a worthy opponent in the battle. You want them to conquer this prospective foe, and transform it into a humble servant that does their bidding.

Plastic, for better or worse, has become ubiquitous. As I wrote in an earlier column, Chase bank has been sending my kids — ages 4, nearly 8, and 10 — credit card solicitations ever since I signed them up for a Continental frequent flyer program. This, despite calls to the company asking it to stop.

So your kids have two options — become enslaved by late fees, finance charges and high interest rates on mortgages and other loans, or conquer plastic and use it to build a stellar credit score, get cash back and earn free travel perks. The sooner they understand their options, the better.

Think of credit cards as similar to online social networking — another phenomenon that didn’t exist when I was a kid. Do I ban my kids from using the computer? Of course not; we discuss which sites are safe, which sites aren’t and why they should never give anyone personal information online.

If they aren’t getting them already, teens will be inundated with credit card offers the second they set foot on a college campus, where they’ll be urged to sign up in exchange for a T-shirt or Frisbee.

Article:Targeting the small and medium enterprises segment, Citibank and Jet Airways have together announced the launch of co-branded credit cards. Jet Airways Citibank Platinum Card and the Jet Airways CitiBusiness Card are the new products. The latter is the first airline co-branded card.

Abstract: 

SBI to cash in on retail boom by installing terminals in smaller towns. Also, launching the International Gold Debit Card.

In expansion mode, plans to install  25,000 ATMs in the next three years.

Article:

State Bank of India wants to use its vast branch network to get a little more of the fee income from credit card purchases. It plans to acquire one million Point of Sale (POS) terminals — machines used to swipe credit cards — over the next three years and put them up at shops. Mr O.P. Bhatt, Chairman and Managing Director, State Bank of India, said that the bank’s strong presence in various cities would act as a benefit in this venture. “It will act as a source of income for the bank. However, the customer would not be charged for the same.”

Some of these POS terminals are owned by ICICI Bank, HDFC Bank, HSBC and Citibank. These banks pay the merchants the value of purchases made by cardholders. Banks that give cash to the merchants are in effect doing it on behalf of the bank that has issued the credit card in the first place. Hence they get to keep a small portion of the cash discount that the merchant establishment offers on the value of the purchase.

There are approximately 3.7 lakh such terminals, mostly in cities. Considering the vast retail trade network in the country, SBI reckons that there is immense scope for installation of more such terminals. It plans to tap the boom in retail trade by setting up POS in towns where it has a stronger presence.

The POS will enable the bank to have access to more customers and will also act as a source of income for the bank. The bank is in talks with several vendors to finalise the plan by the end of this year.

Gold card launch

Mr Bhatt was speaking at the sidelines of the launch of SBI Gold International Debit Card in association with Visa International. SBI has launched the Gold Card, which is first in the series the bank plans to launch with Visa.

The bank also plans to increase the number of ATMs by nearly three times. It has about 7,200 ATMs at present and is planning to set up 25,000 more within three years.

The banking industry has registered a healthy deposit growth of about 23% in 2006-07. Most banks showed a huge growth in short-term deposits during the last quarter of the last fiscal, when the average interest rates were raised to about 9-9.5%.

THE Macquarie group (An Australian major) is looking at entering the wealth management business in the country. It is also looking at setting up a private equity fund for infrastructure financing.