After global financial crisis the banks have cut down their credit card portfolios. Now they prefer to issue credit card to people with sound and high income. Some banks have made a new rule that people who earn less than Rs 30,000 a month can not apply for credit card. Moreover they want some “sound” previous relationship before considering the card application.
Two years ago the bank agents used to chase people to sell credit cards and the cards were given free for lifetime. Now banks are charging range of fees, including for joining and annual maintenance.
An HSBC Bank official told Business Line told, “We are issuing cards on a selective basis as it is an unsecured portfolio.”
ICICI Bank is also going slow on cards, with just about five million in circulation now compared with nine million two years ago.
ICICI Bank says, “ICICI Bank issues cards to both customers and non-customers, subject to fulfillment of credit appraisal norms. We have a full suite of cards products, one of which is a Secured Card (which is for customers with an FD).”
The banks are following this trend because all credit card issuing banks had faced defaults when there was slowdown in country economy. Since then banks started picking out a number of defaulting cards.
According to RBI figures, as on May 2010 the number of credit cards in circulation was 19 million low as against peak of 27 million in June 2008.
A senior banker said, “Now, for many banks, it is more a question of being in the card segment rather than making profits.”
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