Credit card in india

Small-ticket payments and remittances from mobile phones will become a reality soon. Keeping in mind the superior reach of mobile phones as a delivery channel, the Reserve Bank of India on Friday released its final operative guidelines for mobile banking.

The central bank has decided to keep the limit on the ticket-size for mobile banking at Rs 2,500 per transaction, and Rs 5,000 per day. Banks have also been allowed to put in place a monthly transaction limit, depending on the bank's risk perception of the customer.

While the guidelines will enable lenders such as State Bank of India and Axis Bank to go ahead with their launch of mobile-banking services, the central bank has decided to restrict the services only to holders of debit and credit cards. The card user base in the country is 80 million, with 55 million debit card users and 25 million credit card users.

However, it comes as a blow to players who intended to use mobile banking to reach out to the underbanked in rural India. A number of microfinance institutions and mobile payment operators such as mChek, PayMate and Obopay had tied up to offer mobile-based financial inclusion products in the hinterland. Banks, however, have been allowed to use the services of banking correspondents for extending this facility to consumers.

Only Indian rupee-based domestic services shall be provided on the mobile-payment platform, and the use of mobile-banking for cross-border transactions have been strictly prohibited. Banks which are based, licensed and supervised in India will be allowed to offer such services. Further, only banks which have implemented the core banking platform will be allowed to offer mobile banking.

At the same time, the RBI has recommended that all mobile banking transactions are validated through a two-factor authentication system, thereby complying to the latest security and encryption standards. The RBI has also said the long-term goal of the mobile-payment framework in India would be to enable funds transfer from and account in one bank to any other account in any bank on a real-time basis, irrespective of the mobile network the customer has subscribed to.

The guidelines also recommend that banks do not compromise on their know-your-customer and anti-money laundering guidelines. They will also be required to file suspicious transaction reports (STRs) to the Financial Intelligence Unit for all mobile banking transactions, as in the case of regular banking transactions.

It has also been recommended that banks explicitly state the risks to the customer and also get them to sign a contract before the service is adopted. It has also asked banks to make their mobile-banking services available across all phone networks.

The number of mobile phone connections in the country was at about 296 million at the end of July this year and it is growing at about 8-9 million per month, according to telecom regulator Trai. Banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking services. Some banks have also started offering information-based services like balance enquiry, stop payment instruction of cheques, transaction enquiry, location of the nearest ATM or branch, etc. Acceptance of transfer of funds, instruction for credit to beneficiaries of same or another bank in favour of pre-registered beneficiaries have also started in a few banks, the RBI said.

At a time when ICICI Bank, the number one player in the fast-growing Indian credit card market, has cut its 2008-09 growth targets in the business from 25% to 15% due to rising delinquencies, Punjab National Bank (PNB), the country's second largest public sector bank, is about to launch credit cards for its massive customer base of 3.5 crore. PNB is in talks with Visa Inc, the global retail electronic payment network, to start its independent credit card business and is likely to launch the service by October. You may check all available PNB credit cards here also their are rewards point and cashback offers.

At present, the bank does issue co-branded credit cards in collaboration with Hongkong & Shanghai Banking Corporation (HSBC), but it has not been successful. "After the launch of our independent credit card business, the tie-up with HSBC would be discontinued," chairman and managing director, PNB, KC Chakrabarty told The Financial Express . Recently HSBC credit card offering gast approval for all the employees working with MNCs so call their executives today!

Earlier, there were talks that PNB may launch a subsidiary for the credit card business on the lines of State Bank of India. According to reports, PNB had roped in Ernst & Young as a consultant to finalise a potential partner for the credit card business. But a bank spokesperson denied such talks and said, "We have our own department for these services".

Credit card business is considered lucrative and almost all major banks provide this service. ICICI Bank, HDFC Bank, SBI and Bank of India are some of the key players in this portfolio. There are over 40 million customers in the segment at present and the market is growing at 35-40% a year.

But with more credit card use, the chances of default on repayment also increase. Reserve Bank of India has already sounded an alarm on credit card defaults and cautioned banks on the same. RBI deputy governor V Leeladhar earlier this month raised concerns on deteriorating credit quality in the banking system.

According to central bank data, credit card outstanding had surged to Rs 26,500 crore at the end of May 2008, up 87% from a year ago, when it grew by 45%. To put that in perspective, banks' personal loan portfolios saw growth moderating from 23.9% at the end of May 2007 to around 16% till May-end 2008.

Simply put, with banks being picky about giving out personal loans, consumers seem to be opting for the relatively easier-to-access plastic credit, even if it's much more expensive. This comes with its own risks, as...

Ratings agency CRISIL said on Thursday that Indian retail loan quality has deteriorated with rising interest rates, and said some lenders could suffer significant losses.

The agency expected gross non-performing retail loan assets in retail loans to increase to around 4 percent of total retail loans by March 2009 from 2.7 percent in March 2007.

The segments most affected were personal loans, credit card dues, commercial vehicle, used car and two-wheeler loans, CRISIL, a unit of Standard & Poor's, said.

"The system as a whole can absorb this, but lenders who are heavy on unsecured loans and on high-risk customers will suffer significant losses," Tarun Bhatia, head of financial sector ratings at CRISIL, said in a statement.

CRISIL said the situation will remain manageable, as the less risky mortgage and vehicle loan segments make up 80 percent of retail loans outstanding. Rising personal incomes and younger borrower profiles could also provide a cushion in mortgages. Find out the best credit card here which suits your needs and offer you great cashback offers.

Retail credit comprises a major portion of several top private sector banks such as ICICI Bank and HDFC Bank.

ICICI's Joint Managing Director Chanda Kochhar said on Saturday that retail credit, which constitutes the bank's largest loan portfolio, was also the biggest contributor to bad loans.

The Reserve Bank of India (RBI) has tightened policy aggressively over the last two months to cool double-digit inflation.

On Tuesday, the central bank raised its key lending rate by 50 basis points to 9.0 percent, the highest in seven years. It also raised banks' reserve requirement by 25 basis points.

How about getting back a percentage of the money spent on a new LCD television, clothes or the monthly grocery? This may be possible now because banks are offering a cash back facility on debit cards to encourage customers to use more of the plastic money.

Customers can avail themselves of upto ten per cent cash back on debit card (the percentage varies from bank to bank), which are directly linked to the account.

Debit cards enjoy various advantages over a credit card. Unlike credit card, there is no fear of overspending and no penalty and interest charges for late payment. Receiving cash back on debit card is therefore a better proposition for the customer, said senior bank officials.

Banks usually announce such schemes during the festive season, while some banks have such schemes running throughout the year. Some banks offer it on specific categories of purchase or spend, such as on fuel recharge.

Banks, however, do not provide cash back on ATM withdrawals and internet transactions. According to Sai Narain CDK, Head - Consumer Transaction Banking & Strategic Initiatives, Standard Chartered Bank, India, "Consumer research pointed to dissatisfaction with existing reward points and redemption programmes that offered exchange of rewards points with products. Consumers are more interested in instant gratification."

Standard Chartered continuously engages customers with round the year thematic cash back offers. "Double the rewards points - implying double the cash back has been the most successful promotion," said Narain. The bank has seen a 30 per cent increase in customer spends on debit cards last year supported by these promotions.

For banks, higher spends would mean higher income from interchange fee, said a senior bank official at a private bank. "If you can run a campaign of 2-3 months you can see spends increase by 10-20 per cent," said Sameer Nemavarkar, Vice-President, Retail Banking, Axis Bank.

Axis Bank offers cash back schemes for certain segment such as for spends on fuel. According to Nemavarkar, while giving such schemes on Axis credit card is a high-risk high-return game and calls for efficient managing of the outstanding; that on debit card is more of an activation strategy.

"We had run a campaign on activation of new cards by offering a cash back of Rs 50 on a spend of Rs 1,000," he said.

State Bank of India and Barclays have announced cash back scheme beginning July 1, and other banks are expected to follow suit. While SBI gives 5 per cent cash back, Barclays has offered 10 per cent cash facility.

More than half of people living in a village in Worcestershire have become victims of international credit card fraud with money being withdrawn from their accounts in India, Sri Lanka, Denmark and the Dominican Republic.

This is the latest in a series of such complaints in which consumers across Britain have found that money has been withdrawn from the accounts from various locations, including Mumbai and Chennai in India.

Wychbold, a sleepy village in Worcestershire, has 700 homes, of which 400 has had money withdrawn from their accounts abroad.

The local police believe their credit cards have been closed and details emailed to locations abroad from where they were used to withdraw money ranging from 50 pounds to 1000 pounds.

In May, a journalist for the Daily Echo at Bournemouth, discovered that money was withdrawn from his bank account in Chennai, while nearly 500 others in the area suffered the same fate.

British security officials have been grappling with card cloning, by which card details are surreptitiously recorded during transactions at petrol pumps and supermarkets, and emailed across the globe for illegal withdrawals from ATM machines.

Garages and petrol pumps have been the most vulnerable to such scams.

Teresa Tutin, 50, a homecare assistant in Wychbold, said: "Apparently I've bought something at a shop in Liverpool and worst of all apparently I've used a cashpoint in India recently.

Chandrakant Telkar says he had bought goods worth Rs 50,000; Citibank says he defaulted on payment, was not contactable for many years

For two and a half months, 68-year-old Chandrakant Telkar has been going through sleepless nights. Telkar, currently living in Pune, received a credit card bill of Rs 2.79 crore from Citibank to be paid on March 24. The bill was slapped at his Mumbai address in Colaba.

Telkar was using the Citibank credit card since 1990. His card was suspended in 1996 because he failed to pay the dues. Now, after 12 years he got a letter from the Citibank lawyers that his due and payable amount is Rs 2,79,90,748.00.

The latter has also asked Telkar to attend the Conciliation Camp that was organised by Citibank at Andheri on April 19 for "settling the matter" without legal proceedings.

Telkar did not attend the camp. "The credit card that I possessed was with an upper limit of just Rs 30,000. I had used the card a few times for purchasing goods worth about Rs 50,000. It is shocking that the bank has calculated the dues as Rs 2.79 crore," said Telkar, clearly looking stunned by the development.

Godwin Chellam, head, corporate affairs of Citi India, however, said that there was no mistake in calculating the dues. "There was a significant balance outstanding on Telkar's credit card account from February 1996 and we have not received any payment from him since. Over the past 12 years, interest and other relevant charges accrued on the outstanding amount," Chellam told The Indian Express on email.

Asked as to why he did not pay the dues earlier, Telkar said, "I shifted to Pune from Mumbai and started a garment export company in 1982. But the business failed due to various reasons and the company was closed in 1994. I suffered major losses. So I used the credit card for purchasing some items during the crisis."

"The recovery agents of the bank started approaching me at my Mumbai address for money. Because of the severe financial loss in business, I was not in a position to pay the dues. I was ready to pay the money in instalments. But the recovery agents wanted all money in one go," said Telkar, who is now living in a rented apartment in Pune.

"The Citibank also discontinued communication with me for several years. But in November 2005, the recovery agents again started calling me for money. They used to come at my door step and talk rudely with family members," he added.

Telkar's lawyer Sajid Shamim said, "My client was harassed by the bank recovery agents in 2005. So I had sent a legal notice to the bank authorities and Mumbai and Pune police."

"I wonder why the bank kept quiet for so many years if Telkar was a defaulter of such a huge amount," he added.

But Chellam said that Telkar has been "delinquent" on his credit card since February 1996, and has not been contactable for several years. "We had provided Telkar an opportunity to settle outstanding dues on mutually acceptable terms, prior to the initiation of any legal proceedings. For that we invited him for the reconciliation discussion. But he did not attend it."

Credit cards are fast emerging as an acceptable mode of payment for many instruments. At present, insurance payments can be made through cards. Soon, mutual fund investments could be allowed as well.

This has a lot of conveniences and provides a route for investors to reduce administrative work, but it also needs careful attention. This is essential because otherwise the investor can end up paying a very high price for the use.

Benefits: This will eliminate the usage of cheque and there will be no risk of the investment not going through because of some problem with the cheque or the bank. The credit card instruction will be honoured and the investor will have to settle the amount when they get the bill as per the billing cycle.

The other benefit is that even complex investment structures like scheduling four different investments on different dates in a month can be completed smoothly. This is also user-friendly for all those people who are familiar and comfortable with credit cards. Also, administrative work will come down substantially.

Never revolve: The biggest downside of using a credit card for investments is that the onus shifts to the credit card holder to avoid a financial hit. This is because the credit card holder cannot miss the payment on the card on the due date or let it slip into the revolving mode.

When this happens the interest rate kicks in and this can range anything from 36 - 42 per cent a year. And it is bad economic sense to do so simply because a mutual fund investment would give safe returns of 15-20 per cent a year in an equity-oriented scheme, unless you are going through a bull run witnessed in the last four years. Obviously, borrowing at almost 40 per cent for returns of 20 per cent is a case of simple foolishness.

Watch the circumstances: If you are already revolving a good amount, it will be a worse idea to invest through cards. The invested amount will be added to the outstanding balance and that would mean more interest payout. No wonder, the timing of the card cycle is also very important.

If the card cycle for the billing date ends a day or two after the investment, then the bill would have to be paid soon. This basically implies that the investor will not get the advantage of free credit period.

In such cases, it makes more sense to use the normal channels to invest instead of putting themselves at risk of a miss in the credit card payment and the consequent financial impact.

Nature of payment: There are two types of payments that might be possible using a credit card. There could be one time investment or monthly systematic investment plans (SIPs). The former might not matter much because it is a one- off investment and hence can be easier to track for the investor.

On the other hand, a SIP will require regular monitoring and care because they need to ensure that they pay-off the required amount each month in time. Otherwise, it would mean late payment fees being imposed on their card.

It's important that one remembers that though usage of credit cards to invest is a good idea per se, cardholders will have to manage them well to get best results.

State Bank of India and GE Money announced jointly today plans to take the 10 year old strategic partnership to a new level of growth and expansion in the future, after a meeting between Mr. O. P. Bhatt, Chairman, State Bank of India and Mr. Yoshiaki Fujimori, President & CEO, GE Money Asia. SBI Cards, a joint venture between GE and SBI, is the number 2 card player in India, one of the fastest-growing consumer financial services markets in the world.

The SBI Card JV will continue to operate, as it has since the partnership was formed, under two separate JVs: SBI Cards & Payment Services Pvt. Ltd. (SBICPSL), which focuses on the marketing and distribution of SBI Cards, and GE Capital Business Processes Management Services Pvt. Ltd. (GEBPMSL), which handles the technology and processing needs of the JV.

To enable a higher level of responsiveness to customer needs, a CEO will be appointed for each JV, and both these entities would look at expanding the scope of their service offerings.

The JV partners have agreed to nominate Mr. Diwakar Gupta, one of the top executives of State Bank of India, as the CEO of SBI Cards & Payment Services Pvt. Ltd.

Under the new strategic initiative, SBICPSL will be better positioned to participate in the high-growth consumer financial services industry by offering other consumer financial products, such as personal loans and credit insurance, effectively expanding the scope of the JV. This move is a natural extension of the JV's leadership in the credit card space, and the success enjoyed by both partners. By cross-selling related financial services and products to its existing large pool of customers, the JV will also be offering an enriched portfolio of products to help customers realize their financial needs.

GEBPMSL will leverage the scale of its processing platforms to serve other providers in India, in addition to SBI Card's products and services. SBI and GE would maintain the same percentage ownership in both JVs.

Mr Bhatt said, "India's rapidly expanding financial services sector offers several business opportunities and State Bank of India will be pleased to exploit these opportunities, in partnership with a global giant like GE, wherever possible."

Mr. Fujimori said, "We are delighted to enhance the level of partnership with SBI. This new structure enables both GE and SBI to continue to bring innovative financial products and services to India's growing consumer base. India offers GE a tremendous opportunity for growth and investment and our partnership with SBI will play a core role in our strategic growth plans going forward."

The only time Ruchi Vishwanath reaches out for cash from her purse, is when she has to pay her autorickshaw fare. Otherwise, the PR professional who maintains two credit cards, swipes them for every transaction - grocery shopping, paying phone and electricity bills and other expenses. "I use my card for every purchase even for a transaction of Rs 100 when I buy vegetables from the neighbourhood Reliance Fresh. I use the cards for all monthly shopping for my family," she says.

Vishwanath (24) is part of the growing tribe of customers who're increasingly choosing credit cards over cash in the retail space. "When we launched our hypermarket, the credit card usage accounted for 40% of our sale value. In the succeeding five months, this has touched 50% and we see usage growing every month," says Viney Singh, MD of Max Hypermarkets, that runs Spar.

To consumers, cards are a combination of convenience and rewards. "Swiping my card saves me the hassle of visiting the ATM to withdraw money. While I can clear my utility bills with my ICICI Bank card, I cash in on the loyalty points with my Deutsche Bank card," says Vishwanath.

With credit card becoming an easily accessible and aggressively marketed financial product, the consumer base and consequently, the usage has increased tremendously. Over the last three years, the credit card industry has grown at a compounded average growth rate of over 30%. "The usage of credit cards at retail outlets has nearly doubled - from 30%-35% two years ago to 50%-60%," says Nirupam Sahay, VP (marketing), SBI Card.

International credit card scamsters, including those based in India, siphoned off a significant portion of 535 million pounds from British account holders during last year, according to figures released in London on Wednesday.

The Association of Payment Clearing Services said that the 25 per cent initial rise in fraudulent use of British credit and debit cards in three years was mainly due to stolen and counterfeit cards used abroad.

Card fraud overseas rose by 77 per cent last year to 208 million, 39 per cent of the total.

There have been several instances of British consumers reporting money withdrawn from their accounts in India, The Philippines, Australia and Canada.

In February, hundreds of car owners in Lincolnshire in the east Midlands became victims of the scam after they filled fuel from a petrol station in the county.

While there are various ways of using a credit card in india, there are also several things that one should avoid at the same time.

Knowledge of what should not be done is essential for the purpose of avoiding heavy charges that are likely to be levied on the credit card. One area that needs attention is that of cash withdrawal on the card.

Most people fail to understand the cost involved in withdrawing cash on a credit card. People are used to the concept of a card where the person can withdraw an amount on the card from an ATM.

Most people fail to understand the cost involved in withdrawing cash on a credit card. People are used to the concept of a card where the person can withdraw an amount on the card from an ATM.

But this is usually on a debit card or an ATM card. In the case of a debit card or an ATM card, you are using your own money. But when you do this on a credit card, then a completely different scenario comes into play.

Telecommunications operator Reliance Communications teams up with private sector financial institution HDFC Bank to launch a virtual credit card in India. As a result, cardholders will no longer have to physically carry the credit card or reveal details at merchant establishments. Moreover, mobile phones turn into a payment instrument.

The initiative targets HDFC Bank credit cardholders, who are also Reliance mobile subscribers.

HDFC bank has almost 3.5 million cardholders and Reliance owns about 40 percent market share of the mobile market.

Three people, who tried to misuse actor Shah Rukh Khan's lost credit card, are now cooling their heels behind bars.

According to TV channel reports and a report that was published in the Daily News and Analysis (DNA), three people, using Shah Rukh Khan's credit card, tried to buy clothes worth Rs 25,000 on Sunday last.

However, their plan was brought to light by a smart shop executive.

The reports claimed that the three had been arrested under Indian Penal Code sections 34 and 420.

The trio is believed to have told the cops that they had found the card lying on a road in Santa Cruz.

Source: India Syndicate

Standard Chartered Bank (SCB) and Emirates Airlines Wednesday launched a co-branded credit card, the Standard Chartered-Emirates Card.

The card enables the holder to earn skyward miles against every rupee spent on the credit card. These miles can be redeemed for free flights or upgrades on Emirates and its airline partners as well as for a wide array of products and services with non-airline partners.

SCB's regional head for consumer banking (India-Nepal) Murli Natarajan said: "This will provide unmatched benefits to customers travelling across Emirates network."

Emirates vice-president (India-Nepal) Orhan Abbas said the cardholders would gain access to 500 airport lounges and would be automatically enrolled for the airline's frequent flier programme.

Besides, for every Rs.100 spent, four miles would be achieved and the cardholder would be entitled to a comprehensive travel insurance of $1 million.

A UK citizen, Wilfred Louis, 33, was arrested by Navrangpura police on January 10. But even after ten days, they have got nothing out of the culprit.

Not that Wilfred is a tough nut to crack. The cops have failed for a simple reason that they do not have seem to have the time or inclination to solve the case."

The biggest hurdle they face is lack of expertise in dealing with e-frauds. Police sources said that the case files had been shelved soon after Uttarayan bandobast. The accused has been sent to Sabarmati Central Jail.

Wilfred, who claimed to be a UK citizen, had purchased gold jewellery from a shop on CG Road and offered a credit card for payment. The card reader, however, detected the fraud and generated an automated message that first tipped off the bank and then the police.

Cops promptly arrested Wilfred and also got a seven-day remand. But, Wilfred did not have to talk much as the cops were busy attending to routine bandobast.

"But what we know right now is, he is not a UK citizen, as we confirmed it with the embassy at Mumbai. He has an accomplice in the UK who arranged for his passport and perhaps a fake identity. We suspect him to be a Nigerian but are awaiting substantial proof. We cannot communicate with him as we do not know his language and he does not seem to know ours," said R D Rawal, sub-inspector of Navrangpura police, investigating officer of the case.

Low cost carrier,Deccan in association with State Bank of India has announced its special fixed fare offer called "SBI card Flat Fare" for all SBI credit card holders.

A fixed fare of Rs.499- (Basic fare) will be offered to passengers booking on Deccan using their SBI credit card. Taxes and surcharge,as applicable will be borne by the passenger, Deccan said in a release here today.

The offer is valid only for bookings made through the Deccan call centre (Prefix city code 39008888). Bookings under the offer are on till March 15 and valid for travel from January 15 to March 31.

This offer cannot be combined with any other package/scheme.Limited numbers of tickets are available under the offer and will be offered on a first come first serve basis.

Future Cap Holdings is all set to hit the primary markets with an offer of 64 lakh shares.

Samir Sain, CEO of Future Capital told CNBC-TV18 that the investment advisory business will be growing significantly. The company is also setting up 95 "Future Money" outlets in 6 mths and expect to maintain the same growth rate for future rollout. He is hopeful of launching Future credit card soon.

The company is in three lines of business. Future Capital Holdings is part of the Future Group, which is India's largest retail player, the owners of Pantaloon Retail India Limited, India's largest retail company. Future Capital has tremendous synergies with Pantaloon Retail.

Future Capital has three major lines of business. First, it does investment advisory services. It has about USD 1.2 billion worth of assets under management and all of these assets are related to the retail business. For example- one fund that it is an advisor to develops retail malls. Another fund that it is an advisor to acquires real estate, that is then used to develop real estate and commercial property. So, it is really all connected to the retail space.

Another line of business that Future Capital is in is the lending of money or what they call- the retail financial services. Through a company called Future Capital, it actually lends money to, or gives personal loans, to Pantaloon Retail customers who walk in.

Consumer finance schemes and credit card purchases are gradually enjoying a greater share in the sale of consumer durables.

Consumer durable manufacturers and retailers have observed that as more consumers buy premium products such as LCDs, high-end refrigerators, washing machines and IT products, the curve is shifting towards credit purchases.

Increased liquidity and unaffordable real estate costs have fuelled demand for premium white goods as the Rs 25,000-crore consumer durables industry beat its own expectations during the festive season. many big players are offering you credit cards in India and all assures to give best services at a very low rate of interest but always compare credit cards first to avail the good one and enhance your shopping today.

However, the industry is slowly observing the popularity of consumer finance schemes among buyers.

Sukhpreet Singh, general manager, brand marketing, Whirlpool India, said, "The durables industry is seeing a gradual trend towards financing purchases, particularly at the entry-level and high-end products. Almost 20 per cent of home appliances sales come through financing options, but the number could be larger if we take into account unorganised financing too."

About 35,000 credit card customers of Citibank received free tickets worth Rs 23 crore in early 2007 under the 'Fly for Sure' promotional campaign undertaken by the bank in 2005.

The customers became lucky after the bank was cautioned by the Reserve Bank of India (RBI) about consequences if customer complaints were not redressed and commitments made under the promotional scheme not honoured, banking sources said.

The RBI stepped in after receiving a deluge of complaints accusing Citibank of not keeping its promise under the "Fly for Sure" scheme.

The bank subsequently owned up its mistakes and decided to provide air tickets to its credit card customers. Citibank has more than three million credit card customers.

The 'Fly for Sure' episode allowed the RBI to go the whole hog in pursuing its customer service initiatives. The central bank had set up a customer service department in July 2006.

source: business-standard.com

This season, even as airlines hike fares and go stingy on discounts, customers are gaining from the various offers given by travel portals.

For instance, Cleartrip had recently offered 50 per cent discount on all Go Air tickets for flights between midnight and noon. This offer had resulted in considerable increase of Go Air's recently-started night flight tickets.

Others like Yatra are giving away several cashback offers through tie-ups with banks through which a customer gets substantial discount on fares.

According to experts, India is the only country where travel portals are allowed to give discounts even more than what airlines are themselves willing to offer. The advantage for airlines is that the bulk of most of these discounts is funded by the travel portals themselves or by the banks they tie-up with for the offers.

"We had tied-up with HDFC Bank for 50 per cent discount for all airline tickets across the country bought through an HDFC credit card. The discounts were funded by us, the bank and a part of it by the airlines," said Cleartrip vice-president (marketing) Noel Swain.

Though the airline funds only part of the discounts it gets the full revenue for the ticket. For instance, even if a portal sells a Rs 5,000-ticket at Rs 4,500, the airline still gets Rs 5,000 as revenues for the ticket.

The Life Insurance Corporation has delayed the launch of its credit card until after March 2008. The corporation had inked an agreement to create a credit card company with GE Money India, Corporation Bank, LIC Housing Finance Ltd and LIC Mutual Fund in September.

T.S. Vijayan said, "We don't plan to launch it by December or by March 2008."

He did not give details on the reasons of the delay.

The joint-venture partners were expected to finalise the agreement by October. But Vijayan said the company was still in the process of forming the company and a decision was yet to be taken about issuing a small stake to private investors.....

source: http://sify.com/finance/fullstory.php?id=14575588

JetPrevilige, the frequent flyer program from India's leading airline -Jet Airways has entered into a 'credit card points to JPMiles conversion' arrangement with Deutsche Bank and Barclays Bank, two of the leading multi-national banks in India.

This arrangement will help the credit card holders of these banks to redeem their reward points towards JPMiles. A minimum of 500 Barclaycard points are needed for Barclaycard holders so that they become eligible for this reward conversion program. The conversion program for Barclaycard will work in batches. Cardholders will have to convert 1450 Barclaycard points into JPMiles at a time. Every batch of 1450 Barclaycard points will earn 500 JPMiles for JetPrevilige members.

A minimum of 250 Deutsche Bank Reward points are required for Deutsche Bank credit card holders to become eligible for the reward conversion program. Like the Barclaycard points, Deutsche Bank Reward Programs can only be converted in batches. The minimum batch size for reward conversion is 100 Deutsche Bank Reward points. The cardholder will earn 100 JPMiles for every 100 Deutsche Bank Reward points.

Although none of the mobile service providers in India are carrying the iPhone just yet, people of the second most populated country can now get their hands on Apple's hugely successful cell phone.

This isn't even some strange gray market scheme either, because the iPhone is being sold to Indian citizens through their credit card companies. Well, indirectly anyways.

Compact International is the name of the importing company and they are offering Citibank and Diners Club card members in India an opportunity to buy an unlocked iPhone that "works on all Indian networks." There is a premium to be paid over the locked iPhone being sold at AT&T stores however. The net price for an 8GB model is Rs 34,990, which works out to about $882. This cost comes in six monthly installments of Rs 5,835 ($147).

According to a Reserve bank of India report, various banks have issued 66.56 million Kisan Credit Cards.

The number of cards issued in 2006-07 alone was slightly lower at 7.47 million compared with 8 million cards issued in the previous year. On an average, about 9 million cards have been issued during the previous five years.

Of the 66.56 million cards, co-operative banks have issued about 32.71 million cards. Regional rural banks have issued about 12 million cards while commercial banks about 25.5 million cards.

Diwali is the big moment both for the spendthrift buyer and the aggressive seller. While the buyers have shopped with a vengeance, decked-up malls are in readiness to pounce on extra sales. For those who've taken personal loans or shopped using credit cards, it's time to work out the EMIs, says Aniruddha Guha

Crackers have been burst, gifts distributed and sweets savoured. Now, it's time to count your pennies, and make up for all that spending during the festival of lights.

Varun Singh, a senior database manager, went all out with his expenditure this Diwali. He spent heavily on clothes, jewellery, food and a new refrigerator, which took his expenditure beyond the Rs1 lakh mark.

"The festive season has landed me in a big financial crunch. Having a big family means meeting everyone's demands. Thankfully, the Diwali bonus my company gave helped soften the blow a little. I'll now have start saving seriously to pay the numerous EMIs over the next few months."

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Finance charge and fees are prominent features of any credit card and they should never be ignored. How much will a credit card cost and in what way, credit card fees and finance charge go a long way in deciding it. To ensure that you are getting the best deal on your credit card, it is imperative that you understand these two things completely. This article takes a detailed look at how the credit card companies calculate the finance charges and various fees associated with the credit cards.

The finance charges include all the costs and fees levied on the credit card holder either directly or indirectly by the credit card issuing company. Finance charges are calculated by the following methods:

Average daily balance: The balance is calculated as daily average and the annual apr is divided by 12 and multiplied by this number to get your monthly finance charge.

Daily balance: In this method the credit card company calculates the actual balance carried during each day of the billing period and this amount is multiplied by 1/365 of your annual APR value and all the values for a billing period are added together to arrive on a monthly finance charge.

Two -cycle balance: This method of calculating the finance charge is similar to the average daily balance method with an exception that the daily average is calculated keeping your last two billing methods in mind. This method charges more in

terms of interest rates for those who don't pay there card dues in full every month. The unpaid part of your balance will also play its part in determining the monthly finance charge for the next month.

Finance charges are one of the principal ways in which credit card companies earn their revenue. Same is true for credit card fees. Credit card fees can jack up the monthly repayment amount ignificantly and make things worse. One of the most important fees associated with credit card in india is the late payment fees. Credit card companies have their own parameters for applying the late payment fees and enforcing default or penalty APR's.

American Express, one of the leading credit card issuer world over explicitly states that

" Your account is reviewed monthly and will be considered in default if minimum payments are not timely paid one time, or seriously in default if minimum payments are not timely paid two or more times, your account is overlimit three or more times, or your payment is returned by your bank or financial institution, in each case during any portion of the 12-month period ending with the Closing Date of the current billing period. If a Default APR is applied, it will apply for a minimum of 12 consecutive billing periods beginning with the current billing period (unless a higher APR is triggered). Any introductory APR's. or promotional APR's. will terminate if you fail to pay any Minimum Amount Due by its Payment Due Date, or upon any condition that causes a default or other penalty rate to apply to your Account, and the applicable default or penalty rate will apply. We may apply payments and credits first to your balances with lower APR's. (including balances with promotional APR's.)before balances with higher APR's. This will result in the lower APR balances being paid before the higher APR balances."

This should make things clear as there are triggers to attract every fees and once a fee is charged it can be charged for a particular interval and there are conditions for revoking the fees and any other accrued penalty.

Listed below are 12 important fees associated with credit cards and the reason why credit card companies charge them:

Late Fee: Charged when credit card companies
don't receive the monthly payments on time or if the repayment cheque is not honored for any reason.

Cash Advance Fee: Whenever you take a cash advance with your credit card in india, cash advance fees is charged. It can range from 3% to 5% of the cash withdrawn subject to a certain minimum.

Balance Transfer Fee: Charged when a credit card holder transfers his balances to a new card.

Application Fee: It is the fee credit card companies charge on applying for their credit cards.

Account Setup Fee: Some credit card companies charge account set up fee to set up the credit card account of new credit card holders.

Program Participation Fee: If the credit card companies decide that they have a special program which requires a fee to participate they might charge a program participation fee.

User Adding Fee: Some credit card companies charge this fee for adding a new user to existing credit card account.

Credit Limit Increase Fee: If a credit card holder asks for increase in his credit limits, the credit card company might charge a credit limit increase fee to heed to the card holder's request.

Card Replacement Fee: If a credit card is lost, stolen or damaged the credit card company can charge a card replacement fee to reissue the credit card.

Foreign Currency Transaction Fee: Whenever a credit card transaction involves foreign currency, the credit card company can charge a foreign currency transaction fee from the credit card holder.

Annual Fee: Credit card company charge the annual fee from its credit card holder for credit card ownership. Depending on the credit card company's policy this fees might be deducted in advance, on a month-to-month basis or after the 12 month period.

Over Limit Fee: Whenever a credit card holder crosses his credit limit, the credit card company can charge an over limit fee to his account. This over limit fees can continue to be charged as long as the credit card holder's account is beyond his spending limits.

Festivals give you one more excuse to splurge. It's the time to eat out, take a vacation and become footloose. What's more, you can sleep easy if you pay through credit cards and have the option of getting up to 50 per cent of your money back.

Such offers, however, are nothing new. Banks often come out with cash back and discount incentives to attract prospective customers and induce existing ones to use their cards more. But this time they are extending the offer to their debit cardholders as well.

Many of them are also offering up to 50 per cent money back on booking of train and air tickets and hotels through their credit cards.

Those of us who have heard and/or seen the bank's recovery agents will only know how dreadful and demeaning it is to be accosted by them, either on phone or physically. Their voice and tenor is deliberately modulated to make you tremble in your knees. Their countenance, meant to put the fear of Yama -the god of death in you. That apart their lingos, adjectives and language would make gutter language appear musical. Even the female tele-callers of this breed are no better. Some pose of lawyers and others as cops with an arrest warrant in their hands ready to execute you at their will. All said and done, if you under stand how a recovery goon works and the law of the land, you will be able to handle the recovery agents properly and not succumb into paying extortionists amounts when the recovery agents comes calling.

A financial transaction is a civil contract between the creditor and the borrower. It can be enforced only by civil action after the dues have been adjudicated. There a re number of mechanisms for adjudication of dues between a borrower and a banker. The borrower should not hesitate to approach any of these forums well in time and not wait expecting the bank to have some humanitarian convulsions to settle your account properly. Not approaching the proper forums may result in disastrous consequences on many fronts, including the forum itself coming to the conclusion that the borrower has approached merely as an afterthought to ward off the recovery process. However, you can approach the legal forums even after the recovery agents have accosted you.

People are generally using their debit cards to withdraw cash rather than to make payments directly while buying goods, says a recent RBI study.

"The use of debit cards for such payments (for normal purchases) has not yet picked up. Debit cards are used more for cash withdrawals as ATM cards," said RBI's review of payment and settlement systems in the country.

Although the number of debit cards far exceeds that of credit cards, "for normal purchases, the most modes of payments in India after currency have been credit cards," it added.

Growing success of the Indian banking industry has resulted in the heightened demand for payment cards. The market for debit and credit cards is amplifying and RNCOS expects debit cards to outshine credit market in future.

"Opportunities in Indian Banking Sector" is an extensive research on the Indian banking industry that gives deep insight regarding the opportunities and challenges in the industry.

According to a recent report on the Indian banking industry published by RNCOS, the number of debit and credit card users in India is anticipated to reach 73.4 Million and 406 Million by the year 2010 and 2011 respectively.

The RNCOS report said that the frequency of transactions through credit cards will rise in comparison to debit cards. However, the Indian financial card market will be dominated by the increasing number of debit cards rather than credit cards. It is supported by the fact that the number of debit cards in circulation increased from a quarter of a million in 1999 to 28 Million in 2004.

Bank of India would aim to enter the mutual fund business and re-align its credit card business, after its life insurance foray gets off the ground, said TS Narayanasami, chairman and managing director, Bank of India in an interview with Abhijit Lele and Shriya Bubna. Excerpts:

There has been a sudden surge in credit offtake in September after a subdued performance in the first five months. Is the spurt in credit growth sustainable?

Efforts were being made to increase credit from the beginning of the year. So it is very likely that many of the earlier sanctions crystallised into disbursements last month. With the onset of a busy season, credit should be on the right course.

Would banks be forced to revise business performance targets?

It depends on each bank. Domestic credit, in our case, grew by Rs 5,000 crore in the first half. It is a fairly comfortable situation, but not to the extent that we wanted. The disbursements in this quarter should be about Rs 7,000-8,000 crore and this should keep us on course.

How have the curbs on external commercial borrowings (ECBs) impacted the bank's overseas business?

The curbs have not impacted our business as we are funding corporates looking for capital expenditure directly from overseas branches. ECBs come into picture only when the money is coming into India.

We are funding mergers and acquisitions by Indian companies and are giving foreign currency loans for acquisitions abroad. The share of overseas advances in the bank's book is 20 per cent (the total advances stood at about Rs 87,000 crore at the end of June 2007).

As part of its retail expansion, Kotak Mahindra Bank plans to enter the credit cards business by March 2008.

"We plan to introduce silver, gold and platinum credit cards. We will target high networth individuals," said K V S Manian, group head of retail liabilities & branch banking, Kotak Mahindra Bank.

The bank intends to set up this credit card business on its own rather than though tie-ups with other entities.

Branch expansion is also on the cards. Currently, the bank has 134 branches across 92 locations. "By May 2008 we plan to have more than 200 branches," Manian said. Besides, the bank will also set up 75 additional ATMs by February 2008, taking that tally to 150.

The advent of credit cards have not just improved the buying power of individuals, but has also made it quite imperative for the vendors to be ready with their card swiping machines, or else they would end up losing big money.

Since the latest statistics from the credit card companies elucidates that consumers spend nearly Rs 50,000 crore annually through credit cards, which is expected to grow at 50 percent over the next 4-5 years.

At present, about 87 percent of the entire plastic money transaction is done through credit cards. Further figures state that while travel and hotel bills along with dining, account for nearly 25-35 percent of the total purchases, jewellery purchase accounts for a staggering 10-11 percent. This is followed by apparel purchase at 8-10 percent and consumer durables at 6-7 percent.

"Travel has definitely become much larger a segment than what it was two years ago. Airline tickets, both domestic and international, are now bought through credit cards making it the largest category for credit card purchases," said an industry expert who did not wish to be identified.

Rapid loan growth in emerging markets including India could lead to asset quality problems in the future even as these countries are showing good economic growth, says the latest Standard & Poor's report.

Credit cards are very much affected from easy and high demands of loans becoming recursive and more versatile in Indian economy market.

The study titled 'Emerging Market Sovereigns Have Deeper Roots To Withstand Today's Gales' says that the increase in the ratio of credit to Gross Domestic Product (GDP) has been 15 per cent or more for countries including India, Bulgaria, Russia, Kazakhstan and South Africa.

With the festival season upon us, it's time for all kinds of offers from banks and companies. A little help...

''All things bright and beautiful,'' a famous hymn that we learnt in school applies to urban India today. The economy is booming, the stock markets, despite global slowdown, are doing exceptionally well and salaries are also not doing too badly either. The corollary is that the Indian consumer has money to spend. And now that the festival season is here, consumer goods companies and banks would like you to splurge all that money and if falling short, there will always be ready credit available.

Great offers from credit card companies will also be on. They will all invite you to spend with reimbursements of up to 50 per cent cash back on airfares and hotel stay. A practical way of saving money is to use these cards through various travel websites to save money. There are also extra reward points on usage which can be redeemed for gifts or frequent flyer miles on your airline. There are even mega prizes like cars through lucky draw for those credit card holders who swipe their cards during this period.

If your card has a cash back facility, make best use of this to get some money back on your purchases. However, remember that there might be a maximum limit of cash back that the credit card provides in one billing cycle. Also, while using all these services it is important to note that there is an interest cost of 36 per cent a year on these expenditures.

Travel services company, Yatra Online and global financial services provider Barclays will soon launch the Yatra Barclaycard, an online-travel co-branded credit card and a multi-carrier frequent flier programme.

The card offers attractive travel benefits and rewards, and is tailor-made to keep pace with the rapidly growing demands of frequent business and leisure travellers, Yatra Online Services CEO and Co-founder Dhruv Shringi said in a statement.

The Yatra Barclaycard is designed for the fast growing group of Indian travellers offering wide global acceptability, flexibility on credit limits and billing dates, while the Yatra Miles programme offers travel-related benefits.

"The range of cards especially targeted at Indian travellers who are increasingly using online travel services without having their spend rewarded," Barclays Bank PLC Head of Cards-India Kusal Roy said.

India is racing up It's credit card business to an height from last few months. credit card usage has become rampant in India. The burgeoning middle class is willing to splurge on the latest mobile or television as soon as it hits the market. Something, your grand father or mother would never have advised you a decade back.

Youth, besides being spenders themselves, have the biggest influence on the consumer durables being purchased in the family. Like a father recently confessed, "When I purchase the next mobile, the choice will be made by my son because%u2026 he knows that he will be the recipient of my old mobile.

Also, with credit card companies giving add on cards, spending through a card for the youth starts at a very young age. But while all this is great, parents and youngsters are still 'not that educated' about how to use this card effectively so that they do not over spend.

Most of us rely on the convenience, ease, and flexibility of a credit card from time to time, and in fact many of us use credit cards for day to day spending as well as for special occasions such as Christmas and birthdays. When used sensibly and thoughtfully credit cards can prove to be a valuable asset to the consumers, as it means that you don't have to worry about writing cheques or carrying around cash, and you can make your purchases easily and quickly both on the high street and online. You can even make telephone orders quickly and easily with a credit card.

In the wrong hands, however, a credit card can be a liability in a number of ways. Not only does it put you at risk of becoming a victim of fraud and identify theft if you are not careful with your card details, but it also increases the risk of you getting into unmanageable levels of debt that could quickly spiral out of control. This is why it is so important to be careful and sensible when it comes to spending on your credit cards.

Vijaya Bank, one of the early entry from India to world of credit card looking at creating a separate joint venture to charge up the business.It's future plans are to rope in a strategic partner in the venture where it will hold a majority stake.

Vijaya Bank CMD Prakash P Mallyad declined to comment on the development and added that the bank was looking at becoming a more aggressive player in this business.

The bank had at one point, even toyed with the idea of joining hands with one of the private banks in the country to expand its credit card portfolio though the talks did not make much headway. "The exact way forward has not been decided. We may also look at roping in an advisor to help us firm up our plans," a senior official of the bank told ET.

Saugata Roy, a webmaster at a Calcutta-based media company, had resolved never to own a credit card. First of all, he didn't like the idea of being under the burden of credit and, secondly, he did not understand how the system worked. But his resolve was not to last for long. A smart agent of a credit card company persuaded him to opt for a "lifetime free" credit card.

Roy had no idea that this would be the start of a long and harrowing experience. "I was told that the card would be active for life even if I didn't use it at all. But in less than a month, they started calling me regularly, urging me to make at least one transaction for it to become active," he says. So Roy paid through his card once and thought the matter had ended there. But it was not to be.

A few months later, the bank began to press him to go for a family insurance policy of ICICI Prudential that was being offered at a discount to the card's customers. Initially, Roy said that he was not interested. "But they kept on nagging me and in sheer frustration I said 'ok, send me the details'," he says.

This is a such an incredible statistic that service providers have decided that the time is ripe to leapfrog from non automatic vending machines to a new era of the wireless wallet... when Indians can make a variety of payments with a few taps on the keypads of their mobile phones - or a few words of SMS.

And yes, they will be able very soon to wave their mobiles like so many magic wands at auto vending systems to get the soft drinks, chocolates or railway platform tickets of their choice.

The name of the new game is Mobile Payment and it is currently one of the hottest new wireless applications being floated.

State-owned Union Bank of India is planning to enter three new businesses, chairman and managing director M V Nair said. These segments are general insurance, credit card and private equity.

"After we finalise our life insurance venture, we will take up the mutual fund business - for which we are already speaking to a couple of foreign companies for a joint venture. We'll then look into entering businesses like general insurance, private equity and credit card," Nair said.

The bank had last year signed a memorandum of understanding with Bank of India and Japanese insurance major Dai-ichi Mutual Life Insurance. Bank of India is the majority shareholder in the venture with 51% stake, 26% is held by the Japanese insurer, while 23% is owned by Union Bank.

In the last two years, the spending pattern through plastic money has changed drastically. Travelling, dining and jewellery are the top three purchases that Indians make through credit cards. Two years ago, it was jewellery and apparel purchases that formed the largest chunk of purchases through plastic money.

Fuel accounts for a very small portion of credit card purchases as it is largely paid through debit cards. The credit card companies say consumers spend Rs 50,000 crore annually, which is expected to grow at 50% over the next 4-5 years.

"Travel has definitely become much larger a segment than what it was two years ago. Airline tickets, both domestic and international, are now bought through credit cards making it the largest category for credit card purchases," said ICICI Bank head (credit cards) Sachin Khandelwal. With air travel becoming affordable and eating out a regular feature in Indian households, the trend will only gain momentum in future feel experts.

The Reserve Bank of India is (RBI) concerned over banks withdrawing outstanding liability insurance on credit cards with zero annual fees, and sanctioning credit limits - out of sync with customers' debt servicing abilities.

The banking regulator feels that the free credit card culture is leading to increasing instances of high indebtedness among credit card customers.

The RBI is drafting a comprehensive study on the credit card market and a best practices code for credit card issuers. It is also considering a proposal to ensure that the aggregate credit limits on all cards held by a customer do not exceed his or her ability to pay, banking sources said. Banks currently sanction high credit card limits to their customers without taking into account credit limits provided by competing card issuers.

"The free culture is causing problems in the system. Banks and non-banking finance companies active in the credit card business are providing easy access to credit, which is making individuals over-leverage themselves. They offer customers credit limits much beyond their servicing capacity. The banking ombudsman is flooded with complaints on credit cards and banks' recovery practices,'' the sources said.

Life Insurance Corporation (LIC) looking to launch its credit card in the next seven months and is also seeking to grow up its health insurance product.

"We will be launching our credit card business in six- seven months," LIC Chairman T S Vijayan said here today after announcing financial results of the state-owned insurer for the year 2006-07.

LIC, which has formed a separate company for the credit card business, has just signed the joint venture agreements with GE Money and Corporation Bank.

"LIC Housing Finance and LIC Mutual Fund are the other partners and 14 per cent stake will be shared by financial investors," Vijayan said.

About the health insurance plan, he said: "We are working on a product but its contours are yet to be finalised."

"The product will be designed in such a way that it will cover persons of all age groups," he stated when asked whether the health plan would cover senior citizens.

Punjab National Bank (PNB) on Thursday said it has identified joint venture partners for the proposed credit card business. Venture Infotech Global Pvt and American International Group Inc (AIG) consortium has been identified as partner for the business, PNB informed the Bombay Stock Exchange.

The proposed business is likely to start in first quarter of the next fiscal subject to RBI and government approval, said a senior PNB official.

The decision to this effect was taken in the board meeting held on Wednesday.

Now British leader Barclay's plans to grow it's credit card business in India. Co-branded cards, product innovations, tapping urban masses for credit cards, and expanding geographically will be its major focus
areas this year.

"We aim to be one of the top players in credit-card business in 2-3 years," said Kusal Roy, head of cards, India, Barclays.

The bank has decided to bring $70 million in India to fund it's retail banking and credit card foray. Bank has already started business in may and sold 1,00,000 credit cards till date.

Barclays charges 2.95% interest per month, much lower than other banks in the country.The UK bank is also looking at luring customers with innovative features, reward points and discounts.

"We plan to tie-up with various online portals, airlines and hotels to promote our card business. We are also looking at cross-selling," Roy said. Barclays will also rope up with banks for ATM sharing this year.

In order to keep a check on on defaults arising out of credit card business, the bank has set up a special credit bureau that will look at a customer's creditworthiness before issuing cards.

Sidbi proposals include a bureau for queries, a Rs 500-cr venture capital fund and management programmes.

The small and medium enterprises (SMEs) may soon have a credit card in their names. The Lucknow-based Small Industry Development Bank of India (Sidbi) is mulling over the idea of having an SME credit card.

"Today, many public as well as private sector banks disseminate credit cards like the kisan credit card. These are primarily for the farmers and other rural public. However, till now no such card has been made for the benefit of SMEs. This is what we hope to do in near future," informed a Sidbi executive.

Besides this, Sidbi is also considering the idea of having an insurance scheme dedicated to the micro and small-scale enterprises. The thought has evolved from the insights gained by the bank from its customers.

"The customers have a lot of expectations from our bank and we are duty-bound to provide them with all the facilities," the official said. The bank is also in the process to set up an information bureau to receive and resolve SME queries in a time-bound manner.

Sidbi is the principal financial institution for the promotion, financing and development of the small and medium industries.

It operates through a cluster of 64 retail branches spread across the country and plans to increase its presence in rural India by taking the number of its branches to 100 by 2009.

A common security standard for the payment card industry not only helps secure customer transactions, but also saves merchants from heavy fines imposed upon them in cases of fraud. By Varun Aggarwal

The number of credit card users is increasing and there is a corresponding rise in cases of credit card fraud. This phenomenon is prevalent not just in India, but worldwide. "The biggest challenge faced by the industry is that credit card data is being handled by millions of companies, such as banks, retailers, payment gateways, and credit rating agencies. There is no consistent procedure that is adopted to ensure that credit card data is not misused. Even one bad apple can have a huge impact on the community," says Vishal Dhupar, Managing Director, Symantec India.

This serves to highlight the crying need for a common standard that establishes a baseline on how to handle credit card information.

The world celebrates International Literacy tomorrow (September 8). In India, which is pegged as one of the fastest growing economies, two out of every five Indians can neither read nor write. The 2001 census recorded 65.38 per cent literacy, way below the UNESCO assigned threshold of 75 per cent.

While the Government and many corporates and NGOs are lending support towards improving this scenario, Centurion Bank of Punjab (CBoP) has introduced a credit card that aims to support the cause of first-generation learners.

Launched in association with the Art of Living Foundation (AOL), CBoP's 'Miracle' credit card will allow the bank to debit Rs 50 on every new card subscription and add a matching contribution of Rs 50 towards AOL's 'Gift a Smile' programme, which aims to make rural poor children first-time literates. The contributions will go to the Ved Vignan Maha Vidya Peeth near Bangalore established under the aegis of AOL's Sri Sri Ravi Shankar.

"We hit upon an unconventional idea of making a product like a credit card act as a facilitator for a noble cause. People just subscribe and use this like a normal credit card and get to gift a smile to some underprivileged child without any extra effort," says Vivek Vig, Country Head, Retail, Centurion Bank of Punjab.

The 'miracle' happens when a proposed 5 lakh likeminded people willing to 'give back to society' subscribe to this card and each of their 'tiny' contribution goes towards generating Rs 5 crore - enough to sponsor 3,500 children for one year.

Public sector insurance major Life Insurance Corporation of India (LIC) is all set to foray into the growing credit card market soon.

"Besides foraying into the health insurance sector soon, the company will also launch credit cards at the earliest to tap the growing market," LIC zonal manager RV Rao said on the occasion of celebrating 51st year of LIC.

"The idea behind launching the credit card was the steady flow of cash with the LIC and initially the cards will be issued to the policy holders through which they can also pay insurance premiums, besides using the plastic money as any other credit card," he said.

To celebrate the occasion, the company is observing an "insurance week" from today to further expand its footprints.

He said that despite facing competition from private players, LIC commands a market share of 80% while the remaining 20% is shared by all of them put together.

For providing efficient services to the customers, the company has opened 110 satellite branches where customer can deposit the premiums and get information about the existing policies.

In the central zone comprising Madhya Pradesh- Chhattisgarh, the company will set up 59 satellite offices in the current financial year, he added.

In the cashless world Black has become the fashion statement. Yes I am talking about credit cards. The metallic black color is drawing a line between urban-rich and HNIs in the world of cashless freedom. Only a few among the select few have the distinction of being part of the new lexicon of urban legends - black plastic power.

The Black credit card is not for the ones who need credit, but for those seeking that extra premium service in any walks of life. It is a super rich Card. According to industry estimates, there are around only 1,500 of such ultra premium cards in circulation in India Citibank, American Express and Standard Chartered offer such card in India Deutsche Bank plans to launch a similar card soon.

After all we are here to support and enrich the lifestyle of the who's who of society," says Amit Dutta, vice-president, engagement brand & lending, American Express India. Carrying the black card legacy from the West, the bank has this platinum charge card only for a select few in India.

The entry in this black brigade credit card is by invitation only. Today, black cards break all previously defined thresholds of consumer indulgence and extend the possibilities to levels never imagined before. Being a black-card holder means that you've a 24x7 concierge service and you can access it as frequently as your personal valet. "Initially, the demands from customers in India were of the routine sort such as air tickets, flower delivery, movie ticket booking requests, but this is changing fast.

A seminar on "Credit cards-boon or bane for consumers," was organized by the Civil Supplies and Consumer Protection Department on Wednesday.

The aim was to look into the problems of the consumers having ,a credit card. L.N. Vijayaraghavan Principal Commissioner and Commissioner of Civil Supplies said the phenomenal growth in the number of credit cards in the past four or five years had brought in its wake a host of problems. Though there were many advantages in having a credit card, they also caused consumers harrowing experience. Late delivery of bills, penalization for late clearance of cheques for no fault of consumers and accelerated interest rate were the common complaints. Despite banks having a credit bureau, they used them more for negative purposes like exchange of information about defaulters.

Banks have appointed collecting and selling agents. Through these agents banks are marketing credit cards and collecting their dues from cardholders. These selling agents do not give complete information of terms and conditions of credit cards, and collecting agents adopt coercive methods and use abusive language to collect dues. Unfortunately, banks do not take responsibility for their agents' actions.

From September 1, 2007 onwards, the students of Indira Gandhi National Open University (IGNOU) will be able to submit their examination fee using a credit card of any bank with VISA and Mastercard facilities.

IGNOU has also signed a memorandum of understanding (MOU) with Axis Bank (formerly known as UTI Bank) where students can deposit their fees without any additional commission.

About three lakh students who are appearing for various course exams will benefit from these services.

Soon government is going to pass a bill to help the dejected customer who wanted to have credit card but without knowing any reason their applications have been rejected by the banks. To keep a check on the bank services and solve the problems of the people this bill is being formulated.

"We intend to bring a bill to regulate payment systems," Finance Minister P Chidambaram told the Lok Sabha on Friday while replying to questions over credit card industry.

Through this bill government intend to empower RBI to regulate and oversee various payment and settlement systems, including those by card companies and national bodies like Clearing Company of India.

The Payment and Settlements Bill, cleared by Cabinet on Thursday, provides for setting up a new National Payments Company that would take over the retail payment systems.

Reserve Bank of India is likely to regulate payment and settlement systems like credit cards and inter-bank settlement houses like the Clearing Corporation of India. This was revealed by Finance Minister, P Chidambaram in parliament on August 24.

The 'Payment and Settlements Bill', cleared by the Cabinet on August 23 makes provisions for the formation of a national payments company that will take over the current retail payment system.

India's credit bureau, set up by Citigroup Inc, ICICI Bank Ltd and other lenders, will begin grading 100 million borrowers from November 2007 to help banks curb defaults and help credit worthy customers pay lower interest rates.

The Credit Information Bureau (India) Ltd will evaluate ages, salaries and existing loans to assign individual ratings. Multiple applications or using one credit card to repay another will result in lower grades and higher borrowing costs, report agencies. A nationwide database will help Indian banks reduce loans to risky borrowers. In the last two years, the interest rates have risen seven times and this is expected to have an impact on the number of defaulters, according to Standard & Poor's. The grading will help the borrowers from falling into the defaulter's list.

Banks have gathered borrowing histories which will include details like missed installments and repayments from 2004, which was when the Credit Information Bureau was set up, with a database of 4 million borrowers. The credit bureau in collaboration with a unit of TransUnion LLC, a US-based provider of credit reports, will begin assigning three-digit scores to borrowers before Diwali.

Along with its focus on defaults, the Credit Information Bureau, or CIBIL will also maintain histories of borrowers who repay in full and on time, helping them get lower rates on loans. Banks can access client information in about 1 1/2 seconds, from as long as three weeks before the bureau was set up.

For lenders, the scoring will help them assess the risk of a customer and decide on the probability of default. They may begin offering larger discounts in an effort to retain high- scoring customers.

The Credit Information Bureau may include borrowers' mobile phone and insurance track records when government curbs on sharing retail data are lifted.

Canara Bank has launched two new schemes for their high net worth individuals - SB (Savings Bank) Gold and Can-Premium current accounts on August 22, 2007. The schemes aim at retaining and adding to the Bank's share of high net worth clientele.

The schemes offer various services like free debit and credit cards, anywhere banking facility, Internet and mobile banking facility with free fund transfer, tele-banking and issue of demand drafts at concessive charges.

Business Standard reports that these schemes will be available to customers holding an average monthly balance of Rs 1 lakh in their operative accounts.

Such account-holders can also avail the sweep in-sweep out facility, whereby the balances held beyond Rs 1 lakh earn interest at rates applicable to term deposits.

Debit cards have the strongest potential to grow in the Asia-Pacific region over the next decade, according to Howard Allen, CEO of the Lafferty Group, a supplier of data and analysis on more than 60 credit-card markets worldwide. In many markets, he said, credit-card markets had matured or reached saturation, seen in declining margins for issuers due to growing price competition.

Worldwide, the growth of debit-card usage over the past few years has doubled that of credit cards. The debit-card market has room to grow in the Asian region due to its currently low base.

''The golden age of the credit-card market may have gone. It is profitable if done well. If it is done in the wrong business cycle, it can have a detrimental impact on the economy, as in what happened in Korea, Taiwan and Hong Kong,'' Mr Allen said.Growth opportunities for consumer credit are also inconsistent across the region. Consumer-credit growth in China is constrained by price competition, but Thailand, Malaysia and Indonesia have room to expand.

Summer holidays are meant to be spent wining, dining and reclining with all your worries left behind, but one nasty surprise which might await you upon your return is a higher-than-anticipated credit card bill.

And it won't necessarily be because you indulged in one too many martinis by the pool.

Many banks controversially penalise customers for making credit card withdrawals abroad.

The Indian credit card market has grown at a rate of over 30 per cent over the last few years with the premium card segment growing at over 50 percent and the growth is likely to continue in the next five years.

The banks have started going for silver-white of platinum than the yellow gold credit cards. This shift has come in view of growing population of affluent people who, according to industry estimates, spend about Rs 3, 60,000 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 per cent a year.

SBI cards is the second largest credit card issuer in the country having 3.5 million card holders next to the ICICI Bank having 7.5 million card holders.

In view of increasing growth rate of over 30 percent in the Indian credit card market over the last few years and which is likely to continue in the next five years, SBI cards, a joint venture between State Bank of India (SBI) and GE Money, plans to raise Rs 100 crore in the next 12-14 months to maintain the capital adequacy and business expansion.

In this step of maintaining the capital adequacy and business expansion SBI Cards, entered a premium segment of card with the launch of SBI Platinum and also launched SBI Gold and More Card scheme, the products targeting to meet the travel and lifestyle needs of customers.

The new session of college has started. The techno savvy, bright and intelligent, having big dreams in eyes, a stream of students are out of the school and entered in the new life of college. The companies have started targeting them by giving offers. The private banks which have grown with a fast pace have also started targeting these new group of students along with old students.

A decade ago when someone would ask if a high school student should have a credit card, automatically the answer would be 'No'. But today the time has changed the way of looking towards the life and way of living and on top of it the financial status has changed. The ratio of the people opting for the Plastic money is increasing in India. If the banks are targeting the students by giving credit card offers, then do not get surprised. Instead of getting worried it is better for the parents to educate their children about the credit cards.

In the Indian credit card market along with the private banks in competition SBI Cards had always been trying to be in the forefront. In this direction SBI Cards, a joint venture between State Bank of India and GE Money, moved further in widening its credit card portfolio, with the announcement of its entry into the premium card segment with the launch of the SBI Platinum Card in association with Visa International. The card aims to offer unique benefits and services to meet the lifestyle needs of the customers.

In addition to this SBI Cards also announced the launch of the SBI Gold and More Card scheme in association with Master Card Worldwide. In this new scheme the cardholders will get assured two percent cash back on any purchase at departmental stores, restaurants, utility bill payments and waiver of the 2.5 per cent charge on fuel purchase at any petrol pump in any city.

MasterCard Worldwide has announced its second quarter 2007 operating results for the Asia/Pacific, Middle East & Africa (APMEA) region. For the quarter, the region reported gross dollar volume (18.1%), purchase volume (21.3%), purchase transactions (21.7%), cash transactions (26.9%) and cards issued (13.3%) versus the same period in 2006.

As of 30 June 2007, over 193 million MasterCard cards (excluding Maestro and Cirrus) had been issued by MasterCard customer financial institutions across APMEA. Cardholders in the region made 704 million purchase transactions in the second quarter of 2007 and could use their MasterCard cards at over 7.4 million acceptance locations throughout the region.

More and more people are doing their transactions with credit cards almost everything on plastic. With time there is going to be addition of plastic money users. In credit card the main features are Personal Identification Numbers (PINs), passwords and credit card numbers.

University of Houston research team has developed unique face recognition software which will make identification procedure effortless. The Personal Identification Numbers (PINs), passwords and credit card numbers will become a thing of the past.

Listening to a late night radio recently there was a committed follower of the talk show host who was exclaiming that after taking the cure for piling up significant debt that after 5 years of work, the couple was debt free. The caller came from the painful pile of debt ranging from credit cards, mortgages, car loans and the like which started out so innocently buy layer by layer they were "owned" by the banks. Many couples need credit for homes, cars and the convenience of having a card for travel. It's the abuse of this availability of the ready credit that gets credit card users in trouble.

In so many cases personal bankruptcy is the only option for persons facing a ton of debt. Banks lobbied to slow that down by forcing debtors to move into a Wage Earner Repayment Plan (Chapter 13) if their income was high enough. Consumers who incur debt need to pay it. It's what expected. However, if the Credit Card issuers grease the skids by making this access to easy credit super convenient what responsibility do they have in a consumer's slide into a mountain of debt? If a business plays to the weaknesses of human nature by making it too easy and accessible without stressing the importance of budgeting, building assets and careful use of credit then where does one draw the line for responsibility?

Arigit Sengupta, a hotel manager in Bangalore, swears he is never using a credit card again. After spending Rs 30,000 , or $740, on his card and paying his minimum balance on time, he said he wound up owing his bank more than three times that amount. "The kind of interest they charge, not even a chartered accountant could understand," he said.

Local and foreign banks are aggressively marketing credit card accounts in India, because it has ideal customer base: a fast-growing middle class with growing disposable income.

But persuading Indian consumers to use credit cards has been more problematic than expected. After years of hard sales, there are fewer than four active credit cards for every 100 Indian adults, one of the lowest rates in the world. And at a time when foreign banks like Barclays continue to jump into the business, an organised backlash against credit cards is building.

With the coming up of MNC in India the financial status of the people has also gone up. More and more people are investing their money and taking loans for home, auto and durable loans. In this race the South Indians are emerging as the top credit consumers in comparison to North Indians.

A survey was conducted by Indian Financial Scape----- A District Profile 2005-6, a recent study by New Delhi-based research firm Indicus Analytics, exclusively made available to Economic Times. The study shows besides Chennai and Bangalore, other credit-friendly districts from the south include Hyderabad, Ernakulam, Pathanamthitta, Coimbatore, Kottayam and Thiruvananthapuram top in the list of credit consuming districts in the country. Chennai district tops in per capita housing loans (Rs 22,937) while Bangalore does it in absolute terms (Rs 14,222 crore).

Prepaid cards bring a host of benefits to a card holder. The convenience, security and financial discipline they promote make them increasingly popular and cost-effective. The IMPACT Visa® Card is a very popular prepaid card . This Prepaid MasterCard® Debit Card does not extend you credit. Instead, accounts are prepaid for a specific amount and accounts are only good for the balance you have loaded/applied. The IMPACT Visa® Card has a wide acceptability and this Prepaid MasterCard® Debit Card can be used at more than 20 million locations worldwide.

According to the latest available data, which covers the first 10 months of 2006-07, indicates continued healthy growth in the number of credit cards which is increasing at 28% year-to-year. Over the same period, the value of credit card transactions grew by 20%.

In next few years credit card companies have plenty of scope in India to expand their customer bases vigorously.

The ministry of urban development and poverty alleviation along with the National Housing bank (NHB) is planning to set up at least 2 million low-cost houses in the next few months in metros and other urban areas.

According to media reports NHB is in talks with banks and other housing finance companies.

These houses would be targeted at the economically weaker section and the lower income group. There might also be an attempt by the NHB at direct lending to consumers belonging to these categories. The market size for low-cost housing is estimated to touch Rs. 100,000 crore marks within the first few years of the scheme's operation. The immediate demand is estimated to be around Rs. 25,000 crore.

Money worries are global in nature. Here is a checklist to see how worried you are with your finances.

Have you been paying bills with money earmarked for something else or using up your savings to pay everyday bills?

Are you making only minimum payment on a credit card bill?

Is your emergency fund less than your three months income saved?

If you have answered 'yes' to all these questions, you're up on a winding road towards financial stress. And if you have already started getting headaches, palpitations, sweaty palms, cold hands and have irritating mood swings, and if you have stopped checking your bank balance regularly, just because you are scared to find out how much money you have left - you are heading towards a pathological situation called Money Sickness Syndrome.

More and more people in India are going for credit card there is increase in credit card fraud. Recently one such incident has come in limelight.

The needle of suspicion in a recent credit card fraud points to fuel stations in the city. Somnath Sadhukhan, whose credit card details were fraudulently used to purchase three airline tickets, had only purchased fuel in previous card transactions.

Great India Place one of India's biggest shopping malls in Noida gives an opportunity to the consumers to enjoy shopping in air- conditioned comfort, explore through global brands and in between shopping or after shopping can enjoy sip of cappuccinos.

It also offers the opportunity to enjoy another capitalist craze -- debt.

A 300-staff store Hometown at Great India Place is a mix of Home Depot and IKEA, and where free Hindu religious blessings come with the furniture package. According to the manager of this store Nagendra Singh, its party time here, "Customers find something interesting and they swipe their card. People don't mind swiping a card for one lakh rupees." He says most of the free spenders are often young couples with nuclear families unfettered by the attitudes of an older generation that emphasized on savings.

The use of credit card in India had doubled between 2003-04 and 2005-06, to around Rs.33, 900 crore. As on January 2007 the number of credit card users in India has increased up to 22 million.

In a country like India where population is exceeding 1.1 billion, 22 million credit card users is a tiny number.

According to the latest available data, which covers the first 10 months of 2006-07, indicates continued healthy growth in the number of credit cards which is increasing at 28% year-to-year. Over the same period, the value of credit card transactions grew by 20%.

Greenhouse gasses are blamed for global warming.

General Electric Co., takes another step to help in reducing global warming. GE the world's second-biggest company by market value will offer a credit card that allows customers to use reward points to reduce global warming by purchasing greenhouse gas-emissions offsets.

The Earth Rewards Platinum MasterCard is the first of its kind in the United States, GE said. On Earth Day each year, accumulated points will be used to fund projects that reduce emissions led by a venture of GE's energy finance unit and electricity producer AES Corp.