How ICICI Lost the Credit Card Market & Gain of HDFC.

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ICICI Bank under K V Kamath was one of the most aggressive banks when it came to adopting Technology and led the way for other Indian banks to modernize. However, one of the strategies of ICICI to aggressively resort to unsecured lending backfired. Since 2007, ICICI Bank has been withdrawing from the retail credit market, especially from the unsecured retail segments of personal loans and credit cards. A number of private banks and NBFCs along with SBI have gained market share during the last five years at the expense of ICICI Bank.

ICICI’s unsecured portfolio has continued to shrink and is now only a shadow of what it was in FY07. Both personal loans and credit cards have continued to decline in FY12 by 58% and 9% respectively. We have not seen any intention
from the management

Read moreHow ICICI Lost the Credit Card Market & Gain of HDFC.

Tata’s Launch Platinum, Titanium and Corporate Credit Card

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Tata Group Company – Tata Capital in association with SBI Cards has launched 3 new credit cards to cater to the
affluent Indian and SME / Corporate segment. SBI Cards a JV of SBI and GE will issue and service these cards, while the Tata’s will be responsible for Branding and Marketing.

Tata Platinum and Tata Titanium Cards are targeted at empowering the affluent Indian with high purchasing power. These cards offer upto 6% cash back on certain purchases at select Tata establishments and upto 3x reward points for shopping departmental stores, dining, groceries and also international spends.

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SBI Shifts Focus to Corporate & SME Credit Cards

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India’s fourth largest Credit Card issuer, SBI Cards with a base of 2.18 Mn credit cards has realigned its business strategy. SBI will now focus on more profitable customers, which is Corporates and SMEs.

SBI Corporate Credit Cards
The cost of servicing a corporate card is much lower than a retail consumer credit card. Currently Corporates account for insignificant number and hence will be the future growth vertical. So far SBI has added 250 Corporate Accounts. They will also offer SBI Personal Cards with host of benefits for Executives of Corporate Clients. SBI cards division is also in talks to its Parent company to secure the credit issued on Cards by accessing the Cash Credit line which

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Credit Cards – Spend + APR + Portfolio Value – HDFC Vs ICICI Vs Axis Bank

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Today we’d like to present some facts on consumer spend on credit cards, APR and the overall portfolio of these loans by HDFC Bank, ICICI Bank and Axis Bank.

Average Monthly Spend by Consumer using Credit Cards is as follows
IndusInd Bank lead the pack where Average Spend was Rs 5,297
HDFC Bank Credit Cards – Rs 4,127
Kotak Mahindra Bank – Rs 4,087
ICICI Bank – Rs 3,388
Axis Bank – Rs 3,028
SBI Cards – Rs 2,976

Credit Card APR Comparison
Depending on ones Credit History APR may vary between 3% per month to 4% per month from bank to bank. The following chart shows the comparison

Read moreCredit Cards – Spend + APR + Portfolio Value – HDFC Vs ICICI Vs Axis Bank

Consumer Credit on Cards Increase – Delinquencies Drop – Tips for Healthy Score

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CIBIL has released some interesting Statistics on the state of Credit Cards market in India. The number of credit cards has seen marginal increase YoY. However, the average balance of cardholder of Foreign Banks has risen from Rs 61,000 to Rs 82,000 and in case of domestic banks the average balance has risen from Rs 39,000 to Rs 47,000. So does the rise in balance pose an alarming situation as was the case of American Consumers during 2008 Financial Crisis ? Well, CIBIL has also released another interesting data point – The number of cardholders who have not met their payment obligation in 90 days has reduced from 2.82% to 1.62% in Q4-2011. [Failing for 90 days means,

Read moreConsumer Credit on Cards Increase – Delinquencies Drop – Tips for Healthy Score

Debit Card Acceptance by Merchants to get Cheaper in India – RBI

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The Card Payment Industry in India is pretty small compared to the CASH economy. In 2011, it was Rs 140,000 Cr or USD $28 Bn. The finance minister in his budget speech had envisaged the promotion of electronic payment systems with incentives. The RBI swiftly acted on this move and sent a notification to all the CEOs of Banks operating in India pointing out the discrepancy in Debit Card Vs Credit Card spend by consumers.

Though Debit Cards at 26.37 Mn outnumbered Credit Cards 17.67 Mn, consumers were not spending enough on Debit Cards but rather chose to withdraw cash for spending needs.

Another practice most commonly seen in

Read moreDebit Card Acceptance by Merchants to get Cheaper in India – RBI